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The Importance of Mediation And Arbitration in Healthcare Disputes

Thursday, September 22nd, 2022


Hi. My name is Brad Howard and I’m an attorney here at Brown and Fortunato. I work with a team of attorneys that assist clients around the country to resolve their business disputes. All healthcare providers, whether hospitals, pharmacies, durable medical equipment providers, or physician practices have business disputes in many cases with insurance companies, other companies, employees, and former employees (and in the case of pharmacies with PBMs).

Over the last 30 years, I’ve represented every kind of healthcare organization around the country in some kind of business dispute, and based on that, it’s my recommendation that every healthcare provider should focus on resolving its disputes through alternative dispute resolution rather than trial.

On TV, trials are fun. They’re glamorous, and everybody looks good. In reality, trials are not fun at all. They’re expensive, they take a great deal of time, they’re nerve-wracking, and you can lose. And a lot of companies that go through trial, even when they win the case, they are so exhausted. They spent so much money and energy. They feel like they’ve lost the case.

Another downside of litigation, including trials, is that it’s in a public forum where the whole country gets to hear your business which can be reported by your local paper or by a national organization like Law 360. And, if you lose, everybody’s going to find out about it.

A much better way to resolve your business disputes is through what we call ADR, or alternative dispute resolution. and there are two kinds. The first is mediation and the second is arbitration. It’s our recommendation here at Brown and Fortunato that you consider both mediation and arbitration to resolve your business disputes. Let’s start with mediation.

What is it and why should your company utilize mediation?

Mediation is when two parties in a dispute get together with a third party, who’s a mediator and that party is a neutral party. The mediator works with the parties and goes back and forth to hear the case and to make recommendations to resolve the case. Usually, mediators are attorneys and in some cases, former judges. So logistically, how does mediation work?

Well, the mediator picks a day and the parties get together in a conference room, usually the mediator’s office or by Zoom. They meet, they discuss the mediation process in their case, and then the parties separate and the mediator goes back and forth between the two parties trying to resolve the dispute. That might include money offers or other things that parties want to exchange to resolve the case.

The real benefit of mediation is that you get together with a mediator, resolve the case, you avoid the expense of litigation and of trial. So we highly recommend all healthcare companies consider mediating their disputes.

A second form of alternative dispute resolution is arbitration.

So what is arbitration and why should you consider that?

Arbitration, simply put, is a trial in a conference room. It is decided by an arbitrator that the parties select. So who are the arbitrators? They’re usually lawyers and in some cases former judges that are hired and paid by both parties to hear the case and then to decide it.

The benefit of arbitration over trial is, rather than engaging in a lot of discovery in a public forum that costs a lot of money, the arbitrator has the parties exchange documents, engage in very limited discovery, and then they meet in the arbitrator’s office one day and try their case by presenting witnesses and documents. Usually, the same day or within a week or two, the arbitrator issues a decision, and then the case is over.

So from a business standpoint, both mediation and arbitration make a great deal of sense. They save healthcare providers a lot of money. There’s less risk because you’re not in front of a jury where you might suffer a runaway verdict. Most of the cases settle privately, and the results are not known to the public.

If you have any questions about mediation or arbitration, please feel free to give us a call here at Brown and Fortunato.