A 1997 arbitration clause wasn’t broad enough to cover what came next
Indiana’s appeals court has told CorVel Corporation it cannot dodge the state’s worker’s compensation board.
The Court of Appeals of Indiana on November 10, 2026, upheld the Board’s refusal to send a hospital fee dispute to private arbitration - finding that CorVel’s arbitration clause simply did not cover the fight at hand.
It started with medical bills. Four employees of CorVel’s clients received treatment at Memorial Hospital of South Bend. CorVel - which describes itself as “a national provider of risk-management solutions for the worker’s compensation, auto, health, and disability management industries” - reimbursed the hospital on behalf of the employees’ respective employers.
The hospital said CorVel got the numbers wrong.
Memorial Hospital disputed that CorVel had properly applied Indiana’s statutory fee schedule to the payments. Between 2022 and 2024, it filed five fee-adjustment applications with the Board (one employee was treated twice, producing the extra claim).
CorVel moved to dismiss all five and push the dispute into arbitration. Its argument hinged on a 1997 Preferred Provider Organization Hospital Agreement between the two parties, which included a clause requiring arbitration under American Arbitration Association rules for unresolved disputes.
A single hearing member said no. The full Board agreed, finding it had exclusive jurisdiction over worker’s compensation fee disputes. CorVel appealed.
The appeals court tackled two questions. First: did the contract clearly hand the threshold question of whether this dispute even belongs in arbitration - known as “arbitrability” - to an arbitrator?
CorVel pointed to a recent Indiana Supreme Court decision that held agreements to arbitrate “in accordance with” AAA rules clearly delegate that question. But the court found a key difference. That earlier clause said disputes would be resolved “by arbitration in accordance with the then current rules” of the AAA. CorVel’s clause instead led with how arbitrators would be selected and then said AAA rules would govern “all procedures conducted before the arbitration panel” - language suggesting the rules kicked in only after someone had already decided arbitration was appropriate.
There was another wrinkle. CorVel’s agreement, last amended in July 2014, did not reference the “then current” AAA rules. The applicable AAA rule at that time did not explicitly mention “arbitrability.” The current version does. That gap mattered. The court found the terms were “at best ambiguous” - not the “clear and unmistakable” evidence required.
The second question sealed it. Even if arbitration were on the table, this dispute fell outside the clause’s reach. The agreement covered disputes “that may arise under this Agreement.” The hospital’s complaint was not about which contractual payment term CorVel applied - it was about whether CorVel correctly applied a statutory fee schedule found in Indiana law, not in the contract.
Because the fee schedule lives in the statute, the dispute did not arise “under” the agreement. The court affirmed the Board’s order and sent the matter back for a hearing on proper payment.
For HR teams relying on third-party administrators for worker’s compensation, the practical takeaway is straightforward: an arbitration clause in a provider agreement may not reach disputes grounded in statutory fee schedules, and state comp boards may retain exclusive say over those questions.
The decision has not yet been certified under Indiana Appellate Rule 65(E).
