Case 1:21-cv-00649-RP Document 1 Filed 07/23/21 Page 1 of 11
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`AUSTIN DIVISION
`
`WEBTPA EMPLOYER SERVICE,
`L.L.C.,
`
`Plaintiff,
`
`v.
`
`POST ACUTE MEDICAL, LLC d/b/a
`WARM SPRINGS SPECIALTY
`HOSPITAL OF LULING; and
`AMERICAN HEALTH LAW
`ASSOCIATION,
`
`Defendants.
`
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`C.A. No.
`
`1:21-cv-649
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`COMPLAINT AND REQUEST FOR INJUNCTIVE RELIEF
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`Plaintiff WebTPA Employer Service, L.L.C. (“WebTPA” or “Plaintiff”) files its
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`Complaint for declaratory judgment and injunctive relief against Defendants Post Acute
`
`Medical, LLC d/b/a Warm Springs Specialty Hospital of Luling (“Post Acute”) and
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`American Health Law Association (“AHLA”), and alleges as follows:
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`PARTIES
`
`1.
`
`Plaintiff is a limited liability company existing under the laws of the State
`
`of Texas with its principal place of business located at 8500 Freeport Parkway South,
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`Suite 400, Irving, Texas 75063.
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`2.
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`Upon information and belief, Defendant Post Acute is a Pennsylvania
`
`limited liability company.
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`COMPLAINT
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`PAGE 1
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE WESTERN DISTRICT OF TEXAS
`AUSTIN DIVISION
`
`WEBTPA EMPLOYER SERVICE,
`L.L.C.,
`
`Plaintiff,
`
`v.
`
`POST ACUTE MEDICAL, LLC d/b/a
`WARM SPRINGS SPECIALTY
`HOSPITAL OF LULING; and
`AMERICAN HEALTH LAW
`ASSOCIATION,
`
`Defendants.
`
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`§
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`C.A. No.
`
`1:21-cv-649
`
`COMPLAINT AND REQUEST FOR INJUNCTIVE RELIEF
`
`Plaintiff WebTPA Employer Service, L.L.C. (“WebTPA” or “Plaintiff”) files its
`
`Complaint for declaratory judgment and injunctive relief against Defendants Post Acute
`
`Medical, LLC d/b/a Warm Springs Specialty Hospital of Luling (“Post Acute”) and
`
`American Health Law Association (“AHLA”), and alleges as follows:
`
`PARTIES
`
`1.
`
`Plaintiff is a limited liability company existing under the laws of the State
`
`of Texas with its principal place of business located at 8500 Freeport Parkway South,
`
`Suite 400, Irving, Texas 75063.
`
`2.
`
`Upon information and belief, Defendant Post Acute is a Pennsylvania
`
`limited liability company.
`
`COMPLAINT
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`PAGE 1
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`Case 1:21-cv-00649-RP Document 1 Filed 07/23/21 Page 2 of 11
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`3.
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`Upon information and belief, Defendant AHLA is a 501(c)(3) organization
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`with its principal offices in Washington, D.C. and administers arbitrations through the
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`AHLA Dispute Resolution Service pursuant to AHLA Rules of Procedure for Arbitration.
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`JURISDICTION AND VENUE
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`4.
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`This Court has jurisdiction over this action under 28 U.S.C. § 1331 because
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`the suit arises under the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1, et seq.
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`5.
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`In addition, the amount in controversy in this matter, exclusive of interest
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`and costs, exceeds the sum of $75,000.00, as more fully set forth below, and the parties to
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`this action are diverse, and because more than $75,000.00 is at issue between the parties,
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`exclusive of interest and costs, subject matter jurisdiction is invoked by 28 U.S.C.
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`§ 1332.
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`6.
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`Venue is proper in this district under 28 U.S.C. § 1391(b)(2) because a
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`substantial part of the events or omissions giving rise to this action occurred in this
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`district.
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`FACTS COMMON TO ALL CLAIMS
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`7. WebTPA is a third-party claims administrator that, among other things,
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`provides administrative services to insurance companies and payors, including claims
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`processing services. As part of those administrative services, WebTPA may coordinate
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`services related to provider networks to enable the insurers and payors it serves to offer
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`network access to their members or insureds. WebTPA is not an insurance company,
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`insurer, guarantor, or a payor of benefits under any policy or plan.
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`COMPLAINT
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`PAGE 2
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`Case 1:21-cv-00649-RP Document 1 Filed 07/23/21 Page 3 of 11
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`8.
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`Upon information and belief, Post Acute develops and owns long-term
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`acute care and rehabilitation hospitals throughout the United States, including several
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`Warm Springs facilities, one of which is Warm Springs Specialty Hospital of Luling
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`(“Warm Springs”).
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`9. Warm Springs is a party to a Preferred Facility Agreement (“PFA”) with
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`Private Healthcare Systems, Inc. (“PHCS”) through which it agreed to provide healthcare
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`services to individuals and to be reimbursed at the rates set forth in the PFA for “Covered
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`Care,” which is “care, treatment, and supplies that are reimbursable under the terms of a
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`Covered Individuals’ Contract” with a Payor, or “an insurance company, employer health
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`plan, union health plan or other organization liable to pay or arrange to pay for the
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`provision of health care services to Covered Individuals through a PHCS provider
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`network.” A redacted copy of relevant portions of the PFA is attached hereto as
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`Exhibit A.
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`10. WebTPA is not a party to the PFA.
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`11. WebTPA is not a signatory to the PFA.
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`12. WebTPA is not mentioned by name in the PFA.
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`13. WebTPA did not agree to or consent to the arbitration provision in the PFA.
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`14.
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`From September 2013 through January 2014, almost eight (8) years ago,
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`Warm Springs provided health care services to a patient1 who was insured under a limited
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`benefits policy provided and underwritten by Companion Life Insurance Company, a
`
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`1 The identifying information relating to the specific patient and treatment are omitted from this
`Complaint to ensure the patient’s protected health information remains confidential as required
`by the Health Insurance Portability and Accountability Act (“HIPAA”).
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`COMPLAINT
`
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`PAGE 3
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`Case 1:21-cv-00649-RP Document 1 Filed 07/23/21 Page 4 of 11
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`South Carolina
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`insurance company, for which WebTPA provided
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`third-party
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`administrative claims processing services.
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`15. Warm Springs submitted claims for benefits through WebTPA, which were
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`timely processed according to the terms of the patient’s limited benefits policy (the
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`“Claims”).
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`16.
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`Post Acute contends that PHCS verified coverage for the inpatient services,
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`but WebTPA wrongfully denied the Claims under the pre-existing condition exclusion of
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`the Companion Life policy.
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`17. Article VI of the PFA requires PHCS and Post Acute to settle any disputes
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`between them “by binding arbitration in accordance with the American Health Lawyers
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`Association Alternative Dispute Resolution Service Rules of Procedure for Arbitration.”
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`18. Article VI of the PFA does not specify whether it is to be governed by the
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`Federal Arbitration Act, 9 U.S.C. § 1, et seq., or the Texas Arbitration Act, TEX. CIV.
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`PRAC. & REM. CODE § 171.001, et seq.
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`19. Article IX of the PFA states that “[i]t will be construed in accordance with
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`the laws of the State in which health care services are rendered hereunder, and any
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`provision herein inconsistent therewith will be of no effect and will be severable without
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`affecting the validity or enforceability of the remaining provisions of this Agreement.”
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`20. On April 9, 2021, almost eight (8) years after the Claims were processed,
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`Post Acute initiated arbitration proceedings through the AHLA against PHCS/MultiPlan,
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`Inc. (“MPI”) and WebTPA alleging claims for breach of contract, negligent
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`misrepresentation, promissory estoppel, and violations of the Texas Insurance Code and
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`COMPLAINT
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`PAGE 4
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`Case 1:21-cv-00649-RP Document 1 Filed 07/23/21 Page 5 of 11
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`the Texas Business and Commerce Code based on an alleged wrongful denial or
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`underpayment of the Claims (the “Dispute”).
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`21. WebTPA is not contractually obligated to arbitrate any disputes with Post
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`Acute.
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`22.
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`The PFA obligates PHCS to enter into agreements “with Payors for the use
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`of the PHCS provider network (‘Payor Acknowledgement’)” that “will obligate the Payor
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`to pay or arrange to pay for Covered Care rendered to Covered Individuals in accordance
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`with the provisions of Article VII of [the PFA],” which relate to claim submission and
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`billing. The PFA does not require PHCS to obligate Payors to agree to abide by the terms
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`of Article VI relating to dispute resolution through binding arbitration.
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`23. WebTPA is a party to a Client Services Agreement (“CSA”) with MPI,
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`under which insurers and plans for which WebTPA provides administrative services can
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`access MPI’s network of health care providers, including those created and maintained by
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`PHCS, which is a wholly-owned subsidiary of MPI. A redacted copy of relevant portions
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`of the CSA is attached hereto as Exhibit B.
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`24.
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`25.
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`Post Acute is not a party or signatory to the CSA.
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`The CSA obligates WebTPA to “abide by applicable requirements of the
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`Network Provider Agreements including the requirement that Client shall make payment
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`to Network Providers at Contract Rates for Covered Services rendered to Participants
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`within thirty (30) business days of receipt of a Clean Claim unless otherwise required by
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`applicable law or the applicable Network Provider Agreement.”
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`COMPLAINT
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`PAGE 5
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`Case 1:21-cv-00649-RP Document 1 Filed 07/23/21 Page 6 of 11
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`26.
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`In the case of a dispute between the Network Provider, like Post Acute, and
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`WebTPA, nothing in the CSA obligates WebTPA to arbitrate a dispute with a Network
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`Provider, much less with the AHLA.
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`27. On April 9, 2021, Post Acute initiated an arbitration with the AHLA against
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`PHCS/MPI and WebTPA. A redacted copy of the Demand is attached hereto as
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`Exhibit C.
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`28.
`
`Post Acute allegedly served a copy of its demand for arbitration
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`(“Demand”) on WebTPA by improperly mailing a copy of it addressed to a former
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`employee of WebTPA, who left the company in April 2018 and was neither an officer
`
`nor registered agent of WebTPA.
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`29. WebTPA was never properly served with the Demand.
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`30.
`
`PHCS/MPI appeared before the AHLA and responded to the Demand
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`denying the allegations.
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`31. Despite the fact that WebTPA was not properly served, the AHLA
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`appointed Melinda Jayson (hereinafter, the “Arbitrator”) to preside over the arbitration
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`without the knowledge or consent of WebTPA.
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`32. Reportedly, a status conference with the AHLA took place in early
`
`July 2021. WebTPA had no knowledge of such conference.
`
`33. At the status conference, the Arbitrator reportedly instructed counsel for
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`PHCS/MPI to reach out to WebTPA to inform it of the arbitration and to attend the re-
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`scheduled status conference before the Arbitrator on July 23, 2021, or the Arbitrator
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`would proceed to schedule the case for a final hearing without its input. Reportedly,
`
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`COMPLAINT
`
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`PAGE 6
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`Case 1:21-cv-00649-RP Document 1 Filed 07/23/21 Page 7 of 11
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`Post Acute requested the Arbitrator to enter default against WebTPA if it did not respond
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`to the Demand and appear before the AHLA at the status conference.
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`34. WebTPA recently learned of the pending arbitration with the AHLA,
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`Arbitrator directives, and threatened default.
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`35. WebTPA is not a signatory to the PFA and never agreed to submit to the
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`authority of the AHLA for resolution of any dispute.
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`36. WebTPA objects to the AHLA’s and the Arbitrator’s purported assertion of
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`authority to enter any sort of binding judgment against it and requests the Court to enter a
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`declaratory judgment that WebTPA, as a non-signatory to the PFA, is not obligated to
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`submit to the AHLA’s authority for arbitration of Post Acute’s alleged claims against it,
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`and the AHLA has no jurisdiction to arbitrate the Dispute, or any disputes, between
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`Post Acute and WebTPA.
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`37.
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`The appropriate forum to resolve any disputes between Post Acute and
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`WebTPA involving the patient is this Court.
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`38. By letter dated July 22, 2021, WebTPA, through its counsel, notified
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`Post Acute, the AHLA, and the Arbitrator of the foregoing and requested that no action
`
`proceed against WebTPA pending the outcome of this proceeding. A copy of the July 22
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`letter is attached hereto as Exhibit D.
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`39. As of the filing of the Complaint, neither Post Acute, the AHLA, or the
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`Arbitrator has dismissed WebTPA from the arbitration.
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`
`
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`COMPLAINT
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`PAGE 7
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`Case 1:21-cv-00649-RP Document 1 Filed 07/23/21 Page 8 of 11
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`COUNT I
`DECLARATORY RELIEF
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`40. WebTPA refers to and incorporates as though fully set forth herein,
`
`Paragraphs 1 through 39 above.
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`41. WebTPA brings this suit for a declaratory judgment under both Federal
`
`Rule of Civil Procedure 57 and 28 U.S.C. §§ 2201 and 2202. WebTPA requests the Court
`
`to enter a judgment that WebTPA is not obligated under the PFA to submit to the
`
`authority or jurisdiction of the AHLA to arbitrate the Dispute with Post Acute and that
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`the AHLA has no jurisdiction to issue a binding judgment against it. See 9 U.S.C. § 4 (“A
`
`party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a
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`written agreement for arbitration may petition any United States district court which, save
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`for such agreement, would have jurisdiction under title 28, in a civil action . . . of the
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`subject matter of a suit arising out of the controversy between the parties, for an order
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`directing that such arbitration proceed in the manner provided for in such agreement.”) A
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`justiciable controversy exists as to the rights and status of the parties, which would be
`
`resolved by the declaration sought. It is necessary to obtain declaratory relief in order to
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`resolve this matter and avoid a multiplicity of actions.
`
`42.
`
`The PFA is the only written contract that contains an agreement to arbitrate
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`under which Post Acute purports to submit the Dispute to the AHLA. The PFA invokes
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`federal and state law. See, e.g., In re D. Wilson Const. Co., 196 S.W.3d 774, 778 (Tex.
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`2006) (contracts “governed by the law of the place” where the subject of the contract is
`
`located that reference neither the FAA nor the TAA invoke federal and state law); In re
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`COMPLAINT
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`PAGE 8
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`Case 1:21-cv-00649-RP Document 1 Filed 07/23/21 Page 9 of 11
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`L&L Kempwood, 9 S.W.3d 125, at 127-28 (Tex. 1999) (FAA is part of “arbitration laws
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`of Texas”).
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`43. WebTPA, which is a non-signatory to the PFA, is not bound to arbitrate
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`pursuant to its terms. See EEOC v. Waffle House, Inc., 534 U.S. 279, 294 (2002)
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`(“Arbitration under the [FAA] is a matter of consent, not coercion.”); see also In re
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`Kellogg Brown & Root, Inc., 166 S.W.3d 732, 739-40 (Tex. 2005); Bridas S.A.P.I.C. v.
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`Gov't of Turkmenistan, 345 F.3d 347, 355-63 (5th Cir. 2003).
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`44. Absent WebTPA’s consent to arbitrate, the AHLA does not have authority
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`to issue a binding judgment against it. Nonetheless, the AHLA, through the Arbitrator,
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`intends to proceed in adjudicating the Dispute without WebTPA’s consent or
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`participation and issuing a final judgment purporting to be enforceable against WebTPA.
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`45. As a result, WebTPA seeks the foregoing declaratory judgment relief for
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`which it now sues.
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`REQUEST FOR PRELIMINARY & PERMANENT INJUNCTION
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`46. WebTPA refers to and incorporates as though fully set forth herein,
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`Paragraphs 1 through 45 above.
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`47. WebTPA also requests that the Court enter a preliminary and permanent
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`injunction barring the AHLA from purporting to enter any binding judgment against it.
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`WebTPA will likely suffer irreparable injury if the AHLA is not restrained from entering
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`any sort of binding judgment against it with respect to Post Acute’s alleged claims while
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`this lawsuit is pending, for which there is no adequate remedy at law.
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`COMPLAINT
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`PAGE 9
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`Case 1:21-cv-00649-RP Document 1 Filed 07/23/21 Page 10 of 11
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`48.
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`There is a substantial likelihood that WebTPA will prevail on the merits
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`because it is not bound to obligate any dispute through the AHLA. The harm faced by
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`WebTPA outweighs the harm that would be sustained by Post Acute and the AHLA if the
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`preliminary injunction were granted. The Claims occurred almost eight (8) years ago, so
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`an injunction pending the outcome of this action does not prejudice the rights of Post
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`Acute, given that the claims are long barred by the statute of limitations. Issuance of a
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`preliminary injunction would not adversely affect the public interest.
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`49. WebTPA requests the Court to set its application for preliminary injunction
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`for hearing at the earliest possible time and, after hearing the request, issue a preliminary
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`injunction against the AHLA.
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`50. WebTPA requests the Court to set its application for injunctive relief for a
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`full trial on the issues in this application and, after the trial, to issue a permanent
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`injunction against the AHLA.
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`PRAYER FOR RELIEF
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`For all of the reasons stated herein, WebTPA requests that the Court: (1) enter a
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`declaratory judgment that WebTPA is not obligated to arbitrate any dispute through the
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`AHLA and that Post Acute’s alleged claims against WebTPA are not subject to
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`arbitration; (2) enter injunctive relief judgment enjoining the AHLA from entering any
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`judgment against WebTPA; (3) award costs of suit to WebTPA; and (4) grant WebTPA
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`any other relief the Court deems appropriate.
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`COMPLAINT
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`PAGE 10
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`Case 1:21-cv-00649-RP Document 1 Filed 07/23/21 Page 11 of 11
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`Dated: July 23, 2021
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`Respectfully submitted,
`
`By: /s/ Amber D. Reece
`Andrew G. Jubinsky
`Texas Bar No. 11043000
`andy.jubinsky@figdav.com
`Amber D. Reece
`Texas Bar No. 24079892
`amber.reece@figdav.com
`FIGARI + DAVENPORT, LLP
`901 Main Street, Suite 3400
`Dallas, TX 75202-3776
`(214) 939-2000
`(214) 939-2090 (Fax)
`ATTORNEYS FOR PLAINTIFF
`
`
`
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`COMPLAINT
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`PAGE 11
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