Prime-time television is overloaded with scripted and reality shows involving traditional court room trials with robe-wearing judges presiding. However, there is very little information provided to the American public about arbitrations, which also can be effective for resolving disputes.

Here are a few pros and cons for health care providers to consider when deciding whether to arbitrate disputes with payors. Having this knowledge may assist with contract negotiations when a payor is offering an alternative to taking a claim dispute to court. Just remember that an Independent Review Organization (IRO) is never the best route for any dispute resolution!

So what are some of the pros of arbitration?

1. Arbitration is much more flexible than court actions. For example, an arbitrator will be more understanding of a medical provider’s time constraints and scheduling concerns than a superior court judge. Additionally, many arbitration agreements do not allow for more than one deposition without leave from the arbitrator. In court actions, the payor may notice several depositions, which can be burdensome and time consuming for health care providers.

2. The provider’s legal counsel can choose an arbitrator who has health care law experience. In civil court, the judge may know absolutely nothing about the health care field. The informal setting of an arbitration is better suited than a court to handle multiple claim disputes.

What are some of the cons of arbitration?

1. It is easier for the payors to continue an arbitration than it is to continue a court case. Therefore, arbitrated cases could take longer than a court case to get resolved.
2. Some arbitrators have a reputation for “splitting the baby.” This means giving each side something in the award so that neither party is too upset at the conclusion of the case.
3. There is virtually no opportunity to appeal a bad arbitration decision. 
4. Arbitration can be extremely expensive compared to trial court actions. 
5. Arbitrators have wide discretion in ruling on an award and can go beyond the contract at issue (e.g., equity can play a part in his or her decision).

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