Mediation for Resolving Disputes in the Healthcare Setting
People will always disagree, and unfortunately the healthcare field is no exception. Issues or claims could arise for Kentucky physicians and healthcare administrators over a contract, lease, medical equipment purchase, employment, professional non-compete agreement, an office premises slip and fall injury, or a patient complaint/claim. With the evolving implementation of the Affordable Care Act, disputes are likely to arise in the Accountable Care Organization (ACO) setting among ACO team members, or due to ACO board and owners facing new quality compliance and outcome standards, raising peer review issues and possible confidentiality concerns.
Any of these disputes could result in significant litigation expense, substantial time investment, and emotional stress. Alternative dispute resolution (ADR), and mediation in particular, is a means to manage conflict to produce a more satisfactory outcome. Mediation is the intervention into a disagreement by an impartial third party who can help the contending parties reach their own mutually acceptable settlement of the issues in dispute.
What are the benefits of mediation? Based on many years of experience, both as advocate and mediator, mediation generally:
Is less expensive than litigation;
Gets resolved more quickly than litigation;
Gives the parties more control of the outcome;
Often addresses issues that cannot be resolved in a judicial forum; and
Helps to preserve a professional relationship.
What to do when a dispute arises. When a conflict arises, first determine whether mediation or some other form of ADR may be an option under a contract or applicable law. Many healthcare-related contracts include enforceable ADR provisions. The opportunity for ADR can be waived by a party under certain circumstances if not timely invoked, so it is important to determine if ADR is required or available as soon as a dispute arises.
If a party refuses to participate in ADR, the other party may be able to enforce the ADR provision under the Kentucky Uniform Arbitration Act or the Federal Arbitration Act. There may also be defenses to the enforceability of an ADR agreement, especially between a long-term care provider and their resident.
If there is no ADR agreement, how do we get to mediation? Mediation is voluntary unless there is an ADR agreement, or you are already involved in litigation and the court has ordered you to mediate. If the timing is right, contact the other party and explain your desire to mediate the dispute. Once the parties agree to mediate, the mediator must be selected either pursuant to the terms of the ADR provision or by mutual agreement. The mediator will coordinate logistical details, then circulate a mediation agreement regarding the terms upon which mediation will be conducted. The mediator may also request a pre-mediation position statement from each party.
What happens at the mediation and what is your responsibility? You or a member of your staff may act as the negotiator unless you have retained legal counsel. Keeping in mind that the mediator’s job is not to decide the outcome of the mediation, but to facilitate an agreement between the parties, it is important for a successful mediation to have all of the decision makers physically present at the mediation.
The mediator will convene the mediation, introduce the parties, and go over ground rules and procedures, including:
The mediation is confidential. If unsuccessful, the mediator cannot be subpoenaed as a witness in any legal proceeding regarding what the parties discussed at mediation;
Each party will have a turn to present their case. While the other party may hear information they do not agree with, they are not to interrupt the person making the presentation;
A good mediator will state goals, mutual expectations and possible outcomes for the negotiations, clarify the parties’ interests and positions, and identify specific issues in a non-judgmental manner. The mediator may remind all participants to listen, use a positive tone, bargain in good faith, and be willing to compromise to achieve a resolution;
After the parties state their positions, the mediator typically has them move to separate rooms to caucus with the mediator privately to narrow the issues. The mediator will ask open-ended questions, encourage participants to tell their story, and identify weaknesses in their position they may have minimized, overlooked or ignored.
The mediator will then begin negotiation through a process of communicating offers and counter-offers. A skilled mediator develops the parties’ awareness of the costs and benefits of resolution and the possible settlement options.
If a resolution is reached, the terms must be reduced to writing in a “mediation agreement” that is signed by all parties before concluding the mediation.
Why do some mediations fail? Reasons a mediation will end with an impasse include:
The parties’ were not prepared to mediate;
Parties make inconsistent or conflicting offers;
A party refuses to further compromise;
Third parties were not invited to participate; or
The person with ultimate settlement authority fails to attend.
Considering these factors before a mediation begins will result in a far greater likelihood of the mediation being successful.
 See Chapter 417, Kentucky Revised Statutes (KRS Chapter 417).
 9 U.S.C. § 1, et seq.
 See, e.g., Ping v. Beverly Enterprises, Inc., 376 S.W.3d 581 (Ky. 2012).