Payer/Provider Arbitration and Mediation


Most in the healthcare industry would agree with Benjamin Franklin’s assessment that “an ounce of prevention is worth a pound of cure.” However, many may not be aware that conflicts in the payer provider segment of the healthcare industry in particular can be managed in much the same way.

Major stakeholders within the healthcare industry sit on the American Health Lawyers Association Advisory Board and the American Arbitration Association Healthcare Dispute Resolution Advisory Council.Both of these organizations are providing leadership in advancing best practices to reduce cost and eliminate waste in reaching fair resolution of reimbursement disputes.

Payer/Provider disputes have distinct characteristics in that:

  • The antagonists in these disputes have going relationships
  • Notwithstanding mutual dependence, relationship can be strained and distrustful, sometimes antagonistic
  • Arbitrator selection is critical, appointing an individual or panel with a depth expertise
  • Efficient process to preserve working relationship despite strong disagreement
  • Characteristics of payer-provider arbitration
    • Total amount in dispute can be very substantial
    • Hundreds if not thousands of claims
    • Different categories of claims and reasons for payment or denial
    • Complex issues of data analysis for purposes of both liability and damages; often sophisticated statistical issues are involved
    • Significant long-term consequences to reimbursement levels

Effective resolution in terms of cost and outcome requires considerable knowledge of reimbursement practices and underlying clinical issues, as well as strong process management skills for both arbitration and mediation.