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You're a hospital administrator, and one of your vendors is simply not holding up its share of the bargain. Is litigation the only answer? And doesn't the thought of a lawsuit just make your head hurt?

The American Health Lawyers Association (AHLA) offers another alternative, one that promises a swifter and more cost-effective solution to a dispute. It's mediation or arbitration, and the Washington, D.C.-based organization has taken many of the unknowns out of the process.

Launched in 1993, the AHLA's Alternative Dispute Resolution Service was "designed to fill a niche. A number of our members had wanted to try to resolve litigation in a different way. They wanted to use alternative dispute resolution, but some of them were frustrated that the arbitrators and mediators that they would get did not have a great background in health law," Peter Leibold, AHLA executive vice president and CEO, explained.

Thus, AHLA launched its service, offering approved arbitrators and mediators. Generally, a mediator helps the parties discuss their conflict and work out a solution, while an arbitrator makes a decision for the parties.

Most private arbitration and mediation services charge an hourly rate, yet "health lawyers were becoming frustrated that that hourly rate was starting to build up, because they were needing to educate the arbitrator or the mediator on the underlying regulations involved in the dispute," he said. "What we try to do is provide those in dispute with a group of arbitrators and mediators from which they can choose, so that they can essentially come to a consensus on who the arbitrator or mediator should be."

Here's how the AHLA program works: First, the option of arbitration or mediation via AHLA's program is written into the contract, with parties agreeing to use AHLA's rules to resolve any future dispute. Then, should a party be aggrieved, that party sends AHLA a notice, using a form available on paper or online. Then AHLA notifies the other party.

Based on input from both parties, AHLA sends to both sides a list of 10 potential arbitrators or mediators, chosen because of their expertise in the subject under question and perhaps also because of geographic location.

"We ask both parties to rank order their preference, with the ability to strike one person on the list," Leibold said. Each party gives the rank of "1" to its top choice. The arbitrator or mediator with the lowest score is contacted by AHLA and asked to check for potential conflicts of interest.

"We do that before the parties are notified, because if there's a conflict, we'll then go to the person who has the next lowest number," he said.

AHLA has more than 200 arbitrators and mediators on its approved list, which continues to grow.

"Most of them are health law attorneys, and that's why we got into this in the first place, but the list is not restricted to that," Leibold said. "There are retired judges and professional arbitrators and mediators who do not necessarily have the depth of background in health law. But the difference between our service and maybe other services is that we allow the parties to make that determination. They get to look at the qualifications of the people we have sent to them."

Both parties also get to look at the price. Together, they pay AHLA a standard fee to facilitate this process, but each arbitrator or mediator sets his or her hourly rate, which may become a factor in the ratings by the parties. The arbitrators and mediators on the list agree to abide by a strict set of rules and code of ethics from AHLA.

Leibold said the kinds of cases overseen "run the gamut of business and transactional issues" and are usually commercial disputes. For AHLA to facilitate mediation or arbitration for a malpractice claim, "both parties have to agree to use the service after the injury has taken place," he said.

Federal arbitration laws provide "certain limited appeal rights," as do the AHLA rules, "but on very limited grounds. The Supreme Court and other courts have fairly rigorously defended the right of parties to contract to arbitrate or mediate their cases," Leibold said.

With respect to arbitration, he added, evidence demonstrates that it is much more timely and can be much less costly.

"There is also a confidentiality aspect that I think is very advantageous," he said. "These parties generally don't want their dispute to be public — and they often have to work together again. If you have a dispute between a physician and a hospital, neither one wants to alienate the other, but they do want to resolve their dispute. So it makes a lot of sense to use an alternative dispute resolution provider to get it done confidentially and quickly, and then move on with their relationship."

Leibold said the service "comes under the public-interest portion of our mission at AHLA. Most of our mission is dedicated to our members, but this is something we do for the healthcare community because it fills a need."


December 2006

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