JAMS ADR Insights
Experts Predict ADR Will Help Resolve ACA Claims
Published September 25, 2014
By Chris Poole
The use of ADR to resolve healthcare-related claims will increase with the implementation of the Patient Protection and Affordable Care Act (ACA). Experts predict the increase will stem from the need to reduce costs as well as the healthcare groups that will bring new disputes for resolution.
Dr. Leonard Fromer, an assistant clinical professor at the UCLA School of Medicine and a board member of TransforMED, LLC, said the passage and implementation of the ACA is “moving healthcare from a volume-based system to one based on the value of the healthcare provided and their outcomes.” The establishment and projected growth of Accountable Care Organizations (ACOs) is the main component that comes from the PPACA that will change the types of disputes that will arise and the manner in which they are handled and resolved, he explained.
ACOs are groups of doctors, hospitals or other healthcare provides that come together voluntarily to give coordinated high quality care to patients. ACOs were established by the PPACA to provide quality care while keeping healthcare costs down.
Under the old system, parties brought cases based on billing disputes or the meaning of contract terms, Fromer said. However, with the creation of the ACA and ACOs, cases will begin to shift toward disputes over the metrics used by insurance companies and the federal government in Medicare cases to determine reimbursement, quality of health outcomes and value.
Michael D. Roth, an attorney and ADR neutral in Los Angeles who specializes in healthcare disputes, echoed Fromer’s suggestion regarding new disputes. “Doctors will have more interaction with providers in the system, which could lead to disputes over payments based on outcome,” he said.
ADR could also be used due to changes in the ACA, which require that a higher percentage of revenue go directly to medical care and not administrative costs, he said. “ADR could grow in use because it is seen as a cost-saving measure since outside legal costs will count as administrative costs under the ACA,” Roth said.
Katherine Benesch, an attorney with Benesch & Associates in New Jersey, specializing in healthcare law and ADR, said a factor that will encourage the use of ADR more often “is the repeat-business nature of contract relationships in the healthcare sector.
Using mediation or arbitration to resolve a dispute will result in a settlement or decision in “less time for less money,” and the parties will “have had a say in the process,” which goes a long way toward allowing the parties to move on from the dispute and resume their business relationship.
David L. Douglass, an attorney with Sheppard Mullin in Washington, D.C., who specializes in healthcare litigation, said that in his area of practice, healthcare fraud disputes, ADR is often used in civil cases and “has become more popular with industry and government,” he noted.
According to Douglass, “Mediation is the more popular option because it allows parties in very complex cases involving numerous statutes to craft confidential settlements and resolve wide-ranging claims in one process.”
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