Negotiating the finer points of mediation, arbitration

Contract Language. By Steven M. Harris, AMNews contributor. July 2, 2007.

CONTRACT LANGUAGE

A column examining the ins and outs of contract issues

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With the number and cost of lawsuits seemingly skyrocketing, it's not surprising that alternative dispute resolution is at the forefront of physicians' conversations with their attorneys.

Alternative dispute resolution -- such as mediation or arbitration -- can be a better vehicle for resolving health care disputes than going to court.

Arbitration is an adversarial, evidentiary process in which parties submit a dispute for decision by a single arbitrator or a panel of three arbitrators. Typically the parties, upon the beginning of their contractual relationship, agreed in a signed, written arbitration agreement that a future dispute between them will be arbitrated. If the parties are required to submit their dispute to arbitration, the process is referred to in the contract as mandatory. If the parties are required to accept the arbitrator's decision as final, the process is referred to as binding.

Mandatory, binding arbitration agreements are frequently used throughout the medical field. Professional service contracts between hospitals and physicians often contain mandatory, binding arbitration clauses. Many health insurance companies require panel physicians and insured patients to submit payment and coverage disputes to binding arbitration. More and more physicians, hospitals, and HMOs are requiring patients to sign arbitration agreements to submit medical liability claims to binding arbitration.

In contrast, mediation, in essence, is a facilitated negotiation. The mediator is not the decision-maker. The disputing parties keep that role, with the mediator trying to assist in getting both sides to agree to a decision.