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Effective Use of Mediation and Arbitration in Health Care Disputes

Effective Use of Mediation and Arbitration in Health Care Disputes

Source: Bloomberg Law Reports
Date: July 2011

R. Wayne Thorpe, Esq.

Resolution Centers


________________ © 2011 Bloomberg Finance L.P. All rights reserved. Originally published by Bloomberg Finance L.P. in the Vol. 4, No. 7 edition of the Bloomberg Law Re- ports—Health Law. Reprinted with permission. Bloomberg Law Reports® is a registered trademark and service mark of Bloomberg Finance L.P.    This document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be ad- dressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attor- ney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to  suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions.  Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed  under the United States Internal Revenue Code. Any opinions expressed are those of the author. Bloomberg Finance L.P. and its affiliated entities do not  take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy.   Effective Use of Mediation and Arbitration in Health Care   Disputes  R. Wayne Thorpe, JAMS   Various dynamics at play in the health care industry  are likely to contribute to disputes uniquely suited  for resolution through mediation and arbitration. If  the  Patient  Protection  and  Affordable  Care  Act  (PPACA) survives attacks in the courts, continued  consolidation and reorganization among health care  industry  participants  will  likely  occur.  Moreover,  Congress  has  significantly  enhanced  the  federal  government’s ability to pursue fraud claims, and the  U.S. Department of Justice (DOJ) is devoting sub- stantial attention to investigations and prosecution  of criminal and civil cases involving alleged health  care fraud.  Overview of Health Care Disputes  There are many types of significant disputes in the  health care industry:  • Patient safety claims against hospitals,  nursing  homes,  physicians  and  other  professionals,  and  product  liability  claims against drug and device manu- facturers;   • Disputes among members of physician  groups (or between the “group” and in- dividual physicians) or between hospit- als and physicians and other staff;   • False Claims Act (FCA) and other fraud  cases against hospitals, physicians, drug  and device manufacturers, pharmacies,  suppliers, etc.;   • Complex disputes arising from mergers  and acquisitions or from costly transac- tions involving technology and intellec- tual property;   • Payment  and  reimbursement  disputes  involving  private  and  government  payors  and  pharmacies,  physicians,  hospitals, and patients; and,   • Risk management controversies (includ- ing insurance coverage) involving issues  about responsibility for patient injuries  and deaths (especially those outside the  norm  of  “garden  variety”  med  mal  claims)  and  for  various  commercial  claims, for example relating to payment  disputes or fraud claims.   Dispute Needs and Concerns in the Health Care  Industry  Many  health  care  industry  disputes  are  uniquely  suited to resolution outside the judicial system be- cause  of  particular  needs  and  concerns  of  the  health care industry:  • Concerns for patient privacy and busi- ness confidentiality;   • Reduction of time and cost devoted to  disputes  in  an  industry  under  special  © 2011 Bloomberg Finance L.P. All rights reserved. Originally published by Bloomberg Finance L.P. in the Vol. 4, No. 7 edition of the Bloomberg Law Re- ports—Health Law. Reprinted with permission. Bloomberg Law Reports® is a registered trademark and service mark of Bloomberg Finance L.P.   economic, political, and social pressures  to control costs;   • Timely  elimination  of  disputes  that  threaten the very existence of partici- pants  (e.g.,  government  fraud  claims  that  may  threaten  criminal  exposure  and  exclusion  from  government  con- tracting including Medicare and Medi- caid);   • Management of important relationships  with  investors,  lenders  and  financial  analysts; employees/staff; and custom- ers, vendors, and other business “part- ners”—all of which can suffer greatly in  the midst of an ugly public dispute;   • Preservation of on-going business rela- tionships among disputants, particularly  in the context of expanding businesses,  a consolidating industry, and develop- ment of new business relationships;   • Elimination  of  business  and  personal  distractions  among  highly  trained  and  highly  compensated  professional  staff  who  truly  “have  better  things  to  do”  (i.e.,  treating  patients  and  producing  revenue) than spending days in confe- rence rooms and courtrooms with law- yers and administrators;   • A particular aversion to public contro- versy on the part of educational and re- ligious  organizations  who  often  own  health care facilities or play other im- portant roles in the delivery of health  care services; and   • Satisfaction of the patient safety con- cerns  finding  expression  in  the  Joint  Commission  Standards  requirements  for conflict management systems.   Overview of Health Care ADR  In mediation, a disinterested, impartial third-party  can assist parties and their counsel in effectively  communicating  their  respective  positions  to  each  other and in negotiating a settlement. As appropri- ate,  the  mediator  may  provide  questions,  com- ments, observations or opinions about parties’ posi- tions and may make suggestions or proposals about  how to settle the dispute. A settlement reached in  mediation is documented in a binding contract en- forceable in  court.  In arbitration, a disinterested,  impartial  third-party  will  make  binding  decisions  resolving the dispute and enter an award that can  be enforced in court, although the decisions have a  loud ring of finality to them because courts will only  rarely  review  arbitration  decisions.  In  both  processes the mediator or arbitrator will assist par- ties in exchanging sufficient evidence and other in- formation to make the process informed and fair.  Mediation  and  arbitration  can  address  particular  needs of disputants in health care in various ways:  • Mediation and arbitration are more pri- vate  and  confidential  than  court  pro- ceedings; even required public release  of information about a dispute is better  controlled  in  managed  private  processes  than  a  multi-year  public  brawl in a courtroom potentially full of  reporters and competitors;   • Any form of ADR should be quicker to  resolution  at  materially  reduced  cost  and with greater finality than disputes  in the judicial system;   • ADR proceedings allow for utilization of  dispute  resolution  professionals  with  applicable dispute resolution expertise,  plus  relevant  regulatory,  scientific  or  other health care subject matter exper- tise as needed;   • ADR processes provide an opportunity  for thoughtful resolution of emotional  and highly charged disputes surround- ing medical errors, patient safety, end  of  life,  bio-ethics,  and  inter-staff  con- troversy;   • Mediation can provide a forum for re- solving disputes among multiple partic- ipants who might not always be parties  © 2011 Bloomberg Finance L.P. All rights reserved. Originally published by Bloomberg Finance L.P. in the Vol. 4, No. 7 edition of the Bloomberg Law Re- ports—Health Law. Reprinted with permission. Bloomberg Law Reports® is a registered trademark and service mark of Bloomberg Finance L.P.   to the same lawsuit, and can devise so- lutions  sometimes  not  available  in  court.   Current Use of ADR in Health Care  Although at least three organizations (JAMS, Ameri- can Arbitration Association, American Health Law- yers  Association  (AHLA))  offer  health  care- specialized panels of mediators and arbitrators, the  health care industry has been slow to adopt ADR.  There  could  be  many  possible  explanations  why  ADR is underutilized in health care. One possible  explanation is that health care lawyers as a group  might not have the same opportunities for exposure  to mediation and arbitration as full-time litigation  counsel (think employment, construction, insurance  defense and family law) who may participate in a  dozen or more mediations or arbitrations per year.  Many health care lawyers are “specialists” in every  sense of the word, but they are often “health care  specialists” who work with their health care clients  on a variety of regulatory, transactional and litiga- tion legal issues. Other health care lawyers, espe- cially in the health fraud bar, have come to health  law practice after years of practice in white collar  criminal prosecution and defense work with little  ADR experience. Some private lawyers in fraud cas- es are skeptical about whether government agen- cies  are  genuinely  interested  in  mediating  fraud  cases, although anecdotal interviews with both pri- vate and government lawyers reflect both genuine  interest and successful experience on the part of  both federal and state governments in mediating  appropriate health fraud cases.  Against  this  backdrop,  there  are  many  types  of  health care disputes in which ADR can make a posi- tive impact.  Two particular examples include dis- putes related to professional business relationships  of  physicians  and  government  health  care  fraud  cases.  Government Fraud Cases  Among  the  most  difficult  disputes  facing  partici- pants  in  the  health  care  industry  are  FCA  cases  brought by federal or state agencies (often initiated  by  relators)  for  alleged  fraud  in  connection  with  payments under government health care programs  including Medicare and Medicaid. The high stakes  involved in these cases is one important reason why  parties should carefully consider attempting settle- ment through mediation.   Federal False Claims cases can result in civil penal- ties including treble damages plus $5500 to $11,000  per claim, corporate and individual criminal liability,  and  exclusion  from  government  health  care  pro- grams. Most states provide for similar liabilities. The  U.S. Department of Justice has reported that it re- covered over $2.5 billion in 2010 and $4.6 billion  since January 2009 in health care fraud cases. Sev- eral reported recoveries against pharmaceutical and  device companies have exceeded $100 million. Ac- cording to the U.S. Department of Justice, “Fighting  fraud  committed  against  public  health  care  pro- grams is a top priority for the Obama Administra- tion.”  http://www.justice.gov/opa/pr/2010/November/10 -civ-1335.html.  Recent legislative changes have enhanced the abili- ty of the federal government and FCA qui tam rela- tors to pursue False Claims:  • PPACA § 6402 amended the federal An- ti-Kickback Law to make clear that viola- tions of the Anti-Kickback Law can be  brought under the FCA.   • The  Fraud  Enforcement  and  Recovery  Act  (FERA)  imposed  FCA  liability  for  overpayments,  expanded  DOJ’s  power  to issue civil investigative demands, and  amended the FCA anti-retaliation pro- © 2011 Bloomberg Finance L.P. All rights reserved. Originally published by Bloomberg Finance L.P. in the Vol. 4, No. 7 edition of the Bloomberg Law Re- ports—Health Law. Reprinted with permission. Bloomberg Law Reports® is a registered trademark and service mark of Bloomberg Finance L.P.   visions  to  protect  contractors  and  agents in addition to employees.   • PPACA  further  defined  overpayment  liability to provide that retention of an  overpayment  for  over  60  days  after  identification by a provider can become  a false claim.   Government  investigations  of  possible  FCA  cases  provide opportunities to use mediation to satisfy  important goals and interests of both government  and  accused,  while  also  potentially  saving  time,  money and other important resources. The conse- quences to private businesses of an FCA case are  potentially catastrophic in the form of monetary,  criminal, and exclusion liabilities. A mediated set- tlement agreement may avoid (or at least diminish)  exclusion and criminal responsibility while quantify- ing  civil  monetary  exposure  at  a  known,  agreed  upon level. Even where a potential FCA defendant  genuinely (and perhaps correctly) views a potential  claim as defensible, such an approach to mediation  and  settlement  may  often  have  some  merit  be- cause, among other reasons, a defendant can utilize  a  mediated  settlement  to  avoid  the  potentially  enormous financial cost of lengthy further investi- gation,  discovery,  motion  practice,  and  trial,  the  adverse impact on relationships, and a drain on the  time and energies of senior management and legal  personnel.  From  the  government’s  perspective,  substantial and adequate financial payments can be  recovered without the time, risk, and cost atten- dant to a trial against a well-heeled and committed  defendant. Similarly, governments can devote very  substantial, but nonetheless limited, financial, legal,  and  investigatory  resources  to  health  care  fraud  cases, and a mediated settlement may allow gov- ernment agencies to move on to other important  investigations.  When a mediation occurs prior to the unsealing of a  relator’s FCA complaint, a defendant may also have  a chance to vindicate an interest in privacy, or at  least in diminished public and media scrutiny. A de- fendant’s settlement of an FCA case will be public  and likely publicized with some fanfare. But on the  day  after  the  announcement,  investors,  lenders,  financial analysts, employees, vendors, customers,  and other key constituencies will start to view the  issue in the rear-view mirror, rather than through  the continuing scrutiny of a pending case with a still  uncertain outcome. The government in turn gets a  chance to make a splashy announcement, satisfying  the important goal of potentially deterring future  putative wrongdoers, without the cost of a longer  investigation and trial, and without the risk of send- ing the wrong deterrence message if the trial is not  successful.  Finally, use of mediation in government fraud cases  provides  a  “forum”  for  resolution  of  issues  with  multiple  parties  and  agencies.  Settlement  of  qui  tam matters under the FCA can be particularly chal- lenging because each settlement typically has mul- tiple parties, including DOJ, the Inspector General of  HHS (which has administrative authority to exclude  the defendant from Medicare), the relator(s), and  the defendant(s). If a defendant seeks a release of  any state liability for Medicaid claims, a settlement  will also require the involvement of state authori- ties, which ordinarily include a state Assistant At- torney General, and sometimes many of them. Al- though DOJ and most state Attorneys General will  require most FCA settlements to be approved at  various levels of management (for example, Assis- tant U.S. Attorneys and trial counsel at DOJ cannot  ordinarily  make  binding  settlement  offers  and  commitments), this challenge should rarely be sig- nificant because final, “official” higher levels of ap- proval are obtained routinely in the mediation and  settlement of many types of cases involving federal,  state, and local governments.  ADR in Physician Business/Employment Disputes  When physicians’ relationships with one another or  with other providers are fractured, a host of claims  may ensue, including: for repayment of loans; for  breach of non-compete, non-solicitation, and anti- theft provisions; for breach of fiduciary duty; for  © 2011 Bloomberg Finance L.P. All rights reserved. Originally published by Bloomberg Finance L.P. in the Vol. 4, No. 7 edition of the Bloomberg Law Re- ports—Health Law. Reprinted with permission. Bloomberg Law Reports® is a registered trademark and service mark of Bloomberg Finance L.P.   violation of federal, state and local laws prohibiting  employment  discrimination;  and  for  violation  of  federal and state anti-fraud laws. Both mediation  and arbitration can potentially assist parties in at- taining several often mutually shared goals in these  physician fights.   When physicians’ business arrangements with one  another sour, a principal goal is (or should be) to get  the business and legal issues resolved quickly, inex- pensively, and fairly. Many of these business organ- izations and contracts can benefit from contractual  requirements that the parties arbitrate all disputes  among the parties. These disputes often escalate  into ugly charges among former colleagues about  quality of care, billing legalities, employment dis- crimination and harassment, or “stealing” patients,  employees, and technology. Ordinarily, neither side  benefits from airing those charges publicly. A well  drafted arbitration clause in the organizational doc- uments for a professional practice or other contract  documenting the business arrangements between  physicians can require an appropriate type of exper- tise on the part of the arbitrator (including certain  types or years of experience as arbitrator and/or in  health  care  cases),  and  a  hearing  within  a  few  months after an exchange of necessary documents  and information but without the lengthy conten- tious discovery process that often makes litigation  in the courts so protracted and costly. A business  arbitration,  when  properly  managed  by  an  expe- rienced arbitrator, should almost always be quicker  and less costly than a comparable lawsuit in court.   Mediations  in  physician  disputes  are  particularly  well suited to focusing the parties on the real busi- ness disputes needing resolution and away from the  inevitable hurt feelings and sometimes exaggerated  mutual claims of personal and professional miscon- duct.  Mediation is private and confidential and can  result in the amicable termination of business rela- tionships or the salvation and perhaps redirection  of those relationships through negotiated outcomes  often  not  achievable  through  the  legal  system— both points having special import at times in physi- cian cases.  Finally, mediations are successful in set- tling a very substantial majority of cases where at- tempted,  but  as  mediations  result  in  settlement  only when the parties agree upon an outcome, it is  not overly simplistic to say that in contrast with liti- gation, where a judge or a jury makes the parties’  basic business decisions for them, the parties to a  mediation decide the outcome.   R.  Wayne  Thorpe,  Esq.  has  been  a  full-time  ADR  neutral since 1998. He has served as mediator, arbi- trator, special master, case evaluator and in other  neutral roles in more than 1,400 cases, in at least 15  states, involving all kinds of civil disputes, including  at least 100 health care disputes. He can be reached  at wthorpe@jamsadr.com.   

Effective Use of Mediation and Arbitration in Health Care Disputes

Various dynamics at play in the health care industry are likely to contribute to disputes uniquely suited for resolution through mediation and arbitration. If the Patient Protection and Affordable Care Act (PPACA) survives attacks in the courts, continued consolidation and reorganization among health care industry participants will likely occur. Moreover, Congress has significantly enhanced the federal government's ability to pursue fraud claims, and the U.S. Department of Justice (DOJ) is devoting substantial attention to investigations and prosecution of criminal and civil cases involving alleged health care fraud.

Overview of Health Care Disputes

There are many types of significant disputes in the health care industry: Patient safety claims against hospitals, nursing homes, physicians and other professionals, and product liability claims against drug and device manufacturers; Disputes among members of physician groups (or between the "group" and individual physicians) or between hospitals and physicians and other staff; False Claims Act (FCA) and other fraud cases against hospitals, physicians, drug and device manufacturers, pharmacies, suppliers, etc.; Complex disputes arising from mergers and acquisitions or from costly transactions involving technology and intellectual property; Payment and reimbursement disputes involving private and government payors and pharmacies, physicians, hospitals, and patients; and, Risk management controversies (including insurance coverage) involving issues about responsibility for patient injuries and deaths (especially those outside the norm of "garden variety" med mal claims) and for various commercial claims, for example relating to payment disputes or fraud claims.

Dispute Needs and Concerns in the Health Care Industry

Many health care industry disputes are uniquely suited to resolution outside the judicial system because of particular needs and concerns of the health care industry: Concerns for patient privacy and business confidentiality; Reduction of time and cost devoted to disputes in an industry under special economic, political, and social pressures to control costs; Timely elimination of disputes that threaten the very existence of participants (e.g., government fraud claims that may threaten criminal exposure and exclusion from government contracting including Medicare and Medicaid); Management of important relationships with investors, lenders and financial analysts; employees/staff; and customers, vendors, and other business "partners"— all of which can suffer greatly in the midst of an ugly public dispute; Preservation of on‐going business relationships among disputants, particularly in the context of expanding businesses, a consolidating industry, and development of new business relationships; Elimination of business and personal distractions among highly trained and highly compensated professional staff who truly "have better things to do" (i.e., treating patients and producing revenue) than spending days in conference rooms and courtrooms with lawyers and administrators; A particular aversion to public controversy on the part of educational and religious organizations who often own health care facilities or play other important roles in the delivery of health care services; and Satisfaction of the patient safety concerns finding expression in the Joint Commission Standards requirements for conflict management systems.

Overview of Health Care ADR

In mediation, a disinterested, impartial third‐party can assist parties and their counsel in effectively communicating their respective positions to each other and in negotiating a settlement. As appropriate, the mediator may provide questions, comments, observations or opinions about parties' positions and may make suggestions or proposals about how to settle the dispute. A settlement reached in mediation is documented in a binding contract enforceable in court. In arbitration, a disinterested, impartial third‐party will make binding decisions resolving the dispute and enter an award that can be enforced in court, although the decisions have a loud ring of finality to them because courts will only rarely review arbitration decisions.

In both processes the mediator or arbitrator will assist parties in exchanging sufficient evidence and other information to make the process informed and fair.
Mediation and arbitration can address particular needs of disputants in health care in various ways: Mediation and arbitration are more private and confidential than court proceedings; even required public release of information about a dispute is better controlled in managed private processes than a multi‐year public brawl in a courtroom potentially full of reporters and competitors; Any form of ADR should be quicker to resolution at materially reduced cost and with greater finality than disputes in the judicial system; ADR proceedings allow for utilization of dispute resolution professionals with applicable dispute resolution expertise, plus relevant regulatory, scientific or other health care subject matter expertise as needed; ADR processes provide an opportunity for thoughtful resolution of emotional and highly charged disputes surrounding medical errors, patient safety, end of life, bio‐ethics, and inter‐staff controversy; Mediation can provide a forum for resolving disputes among multiple participants who might not always be parties to the same lawsuit, and can devise solutions sometimes not available in court. Current Use of ADR in Health Care Although at least three organizations (JAMS, American Arbitration Association, American Health Lawyers Association (AHLA)) offer health care specialized panels of mediators and arbitrators, the health care industry has been slow to adopt ADR.

There could be many possible explanations why ADR is underutilized in health care. One possible explanation is that health care lawyers as a group might not have the same opportunities for exposure to mediation and arbitration as full‐time litigation counsel (think employment, construction, insurance defense and family law) who may participate in a dozen or more mediations or arbitrations per year.
Many health care lawyers are "specialists" in every sense of the word, but they are often "health care specialists" who work with their health care clients on a variety of regulatory, transactional and litigation legal issues.
Other health care lawyers, especially in the health fraud bar, have come to health law practice after years of practice in white collar criminal prosecution and defense work with little ADR experience. Some private lawyers in fraud cases are skeptical about whether government agencies are genuinely interested in mediating fraud cases, although anecdotal interviews with both private and government lawyers reflect both genuine interest and successful experience on the part of both federal and state governments in mediating appropriate health fraud cases. Against this backdrop, there are many types of health care disputes in which ADR can make a positive impact. Two particular examples include disputes related to professional business relationships of physicians and government health care fraud cases.

Government Fraud Cases

Among the most difficult disputes facing participants in the health care industry are FCA cases brought by federal or state agencies (often initiated by relators) for alleged fraud in connection with payments under government health care programs including Medicare and Medicaid. The high stakes involved in these cases is one important reason why parties should carefully consider attempting settlement through mediation. Federal False Claims cases can result in civil penalties including treble damages plus $5500 to $11,000 per claim, corporate and individual criminal liability, and exclusion from government health care programs. Most states provide for similar liabilities. The U.S. Department of Justice has reported that it recovered over $2.5 billion in 2010 and $4.6 billion since January 2009 in health care fraud cases. Several reported recoveries against pharmaceutical and device companies have exceeded $100 million. According to the U.S. Department of Justice, "Fighting fraud committed against public health care programs is a top priority for the Obama Administration."
Recent legislative changes have enhanced the ability of the federal government and FCA qui tam relators to pursue False Claims: PPACA § 6402 amended the federal Anti‐ Kickback Law to make clear that violations of the Anti‐Kickback Law can be brought under the FCA. The Fraud Enforcement and Recovery Act (FERA) imposed FCA liability for overpayments, expanded DOJ's power to issue civil investigative demands, and amended the FCA anti‐retaliation provisions to protect contractors and agents in addition to employees.

PPACA further defined overpayment liability to provide that retention of an overpayment for over 60 days after identification by a provider can become a false claim. Government investigations of possible FCA cases provide opportunities to use mediation to satisfy important goals and interests of both government and accused, while also potentially saving time, money and other important resources. The consequences to private businesses of an FCA case are potentially catastrophic in the form of monetary, criminal, and exclusion liabilities. A mediated settlement agreement may avoid (or at least diminish) exclusion and criminal responsibility while quantifying civil monetary exposure at a known, agreed upon level.

Even where a potential FCA defendant genuinely (and perhaps correctly) views a potential claim as defensible, such an approach to mediation and settlement may often have some merit because, among other reasons, a defendant can utilize a mediated settlement to avoid the potentially enormous financial cost of lengthy further investigation, discovery, motion practice, and trial, the adverse impact on relationships, and a drain on the time and energies of senior management and legal personnel. From the government's perspective, substantial and adequate financial payments can be recovered without the time, risk, and cost attendant to a trial against a well‐heeled and committed defendant. Similarly, governments can devote very substantial, but nonetheless limited, financial, legal, and investigatory resources to health care fraud cases, and a mediated settlement may allow government agencies to move on to other important investigations. When a mediation occurs prior to the unsealing of a relator's FCA complaint, a defendant may also have a chance to vindicate an interest in privacy, or at least in diminished public and media scrutiny.
A defendant's settlement of an FCA case will be public and likely publicized with some fanfare. But on the day after the announcement, investors, lenders, financial analysts, employees, vendors, customers, and other key constituencies will start to view the issue in the rear‐view mirror, rather than through the continuing scrutiny of a pending case with a still uncertain outcome. The government in turn gets a chance to make a splashy announcement, satisfying the important goal of potentially deterring future putative wrongdoers, without the cost of a longer investigation and trial, and without the risk of sending the wrong deterrence message if the trial is not successful. Finally, use of mediation in government fraud cases provides a "forum" for resolution of issues with multiple parties and agencies.

Settlement of qui tam matters under the FCA can be particularly challenging because each settlement typically has multiple parties, including DOJ, the Inspector General of HHS (which has administrative authority to exclude the defendant from Medicare), the relator(s), and the defendant(s). If a defendant seeks a release of any state liability for Medicaid claims, a settlement will also require the involvement of state authorities, which ordinarily include a state Assistant Attorney General, and sometimes many of them.

Although DOJ and most state Attorneys General will require most FCA settlements to be approved at various levels of management (for example, Assistant U.S. Attorneys and trial counsel at DOJ cannot ordinarily make binding settlement offers and commitments), this challenge should rarely be significant because final, "official" higher levels of approval are obtained routinely in the mediation and settlement of many types of cases involving federal, state, and local governments.

ADR in Physician Business/Employment Disputes

When physicians' relationships with one another or with other providers are fractured, a host of claims may ensue, including: for repayment of loans; for breach of non‐compete, non‐solicitation, and antitheft provisions; for breach of fiduciary duty; for violation of federal, state and local laws prohibiting employment discrimination; and for violation of federal and state anti‐fraud laws. Both mediation and arbitration can potentially assist parties in attaining several often mutually shared goals in these physician fights. When physicians' business arrangements with one another sour, a principal goal is (or should be) to get the business and legal issues resolved quickly, inexpensively, and fairly. Many of these business organizations and contracts can benefit from contractual requirements that the parties arbitrate all disputes among the parties. These disputes often escalate into ugly charges among former colleagues about quality of care, billing legalities, employment discrimination and harassment, or "stealing" patients, employees, and technology.

Ordinarily, neither side benefits from airing those charges publicly. A well drafted arbitration clause in the organizational documents for a professional practice or other contract documenting the business arrangements between physicians can require an appropriate type of expertise on the part of the arbitrator (including certain types or years of experience as arbitrator and/or in health care cases), and a hearing within a few months after an exchange of necessary documents and information but without the lengthy contentious discovery process that often makes litigation in the courts so protracted and costly. A business arbitration, when properly managed by an experienced arbitrator, should almost always be quicker and less costly than a comparable lawsuit in court. Mediations in physician disputes are particularly well suited to focusing the parties on the real business disputes needing resolution and away from the inevitable hurt feelings and sometimes exaggerated mutual claims of personal and professional misconduct.

Mediation is private and confidential and can result in the amicable termination of business relationships or the salvation and perhaps redirection of those relationships through negotiated outcomes often not achievable through the legal system— both points having special import at times in physician cases. Finally, mediations are successful in settling a very substantial majority of cases where attempted, but as mediations result in settlement only when the parties agree upon an outcome, it is not overly simplistic to say that in contrast with litigation, where a judge or a jury makes the parties' basic business decisions for them, the parties to a mediation decide the outcome.