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JAMS ADR Insights

Alternative Dispute Resolution Health Care & Health Systems Mediation

The Managed Mediation of a Payor-Provider Health Care Dispute

by Viggo Boserup, Esq.

A Different Kind of Mediation

Typically, more than 95 percent of mediations are initiated by one or two parties who agreed on a mediator, scheduled the mediation, filed a brief and showed up at the mediation session.  The mediation session is often the first time the parties discuss the issues with the mediator or each other.  The success of mediations involving large numbers of claims and related issues, however, is often in direct proportion to the degree of pre-mediation communication, document exchanges and analyses of these unique types of claims.  It is the goal of the Managed Mediation to facilitate pre-mediation activities and greatly increase the likelihood of resolution.

Unique Qualities of Payor-Provider Disputes

What makes payor-provider disputes unique is that most often there are multiple issues, or buckets, involving decision-makers from different departments within the same organization (i.e., the claims people versus the contracts people versus the case administrators).  Each bucket may contain hundreds or thousands of separate claims that arise under the same contractual relationship.  Because the claims are individually small, the provider most often waits until it has gathered a sufficient number of claims to make filing the action or mediating the case pre-litigation worthwhile.1

These types of claims fall into several familiar categories, such as lack of authorization, medical necessity and usual and customary rates.  Typically, they will span fixed dates of service.  During the pendency of the action, there may accrue additional claims for additional dates of service or claims that were not part of the original claims but arose under the same contractual or non-contractual relationship as the original claim(s).  At the same time, the existing contract may be expiring, may have expired or may be in the process of being renegotiated during the pending action.  So by the time of the mediation, there are original claims, accrued claims, future claims certain to arise from the relationship and often contract issues that need to be addressed.

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1 In one case involving separate provider hospitals, all of whose cases were consolidated into a single civil action, Medicaid claims filed against the administering agency averaged more than 1,000 patients per hospital.  Total amount of all claims was less than $10 million, making individual actions highly impractical.  Two initial mediations set the stage for two settlements, clarification of issues and subsequent sessions.  After two years and additional sessions, all claims were resolved.


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