Would you like to better manage the risk of a medical malpractice or other healthcare-related litigation?  Of course, the answer is “yes, but …”   The “but” is usually related to the cost involved or the time commitment necessary to do so. Arbitration agreements represent a low-cost, low-effort way to accomplish that goal at relatively low cost and without inconvenience.

Binding arbitration is a method of resolving disputes entirely outside the court system. Disputes submitted to arbitration are not heard or decided by a judge or jury; instead, a private individual, called an arbitrator (who is usually a retired judge or a well-regarded attorney), hears the evidence and resolves the dispute. For those healthcare related disputes that are covered by Indiana’s Medical Malpractice Act, an arbitration agreement retains all of the benefits of the Act, e.g., medical review panel screening process, a cap on liability, anonymity, etc. Then, if the claim proceeds beyond the medical review panel level, the arbitration agreement activates, and the court system is bypassed in favor of private arbitration.  For those claims which are outside the purview of the Medical Malpractice Act, such as those involving non-qualified providers, or claims that fall outside the Act’s definition of “medical malpractice,” the benefits of an arbitration proceeding as opposed to traditional litigation in court, are immediately available.  Among those benefits are:

  1. Lower cost: This can be very important if the provider’s insurance policy provides for a deductible amount or a self-insured retention, and it can be critically important if the particular claim involves an uninsured risk.
  2. Faster Resolution: A typical medical malpractice claim takes two or more years to resolve after the medical review panel process is completed. An arbitration agreement can drastically reduce that time, permitting the provider to get the claim “off the books” faster which provides advantages when applying for future insurance, credentialing, etc.
  3. Better Results:  Arbitration forums typically are better insulated against appeals to sympathy or the “send a message” mentality that juries sometimes adopt in court trials. The arbitrator is much less susceptible to such tactics.
  4. More Control:  Arbitrations are shorter than trials.  The parties typically have more control over scheduling and the presentation of evidence, so that the arbitration forum involves far less inconvenience than a traditional litigation.

Because arbitration agreements favor the healthcare provider, they are closely scrutinized by the Courts which are asked to enforce them. The arbitration agreement must be drafted with exquisite care in order to anticipate these challenges to its enforceability.  Fortunately, the drafting is a chore that has to be done only one time, and any cost incurred in defending the enforceability of the agreement once a claim is made is typically covered by the provider’s liability insurance. Most importantly, arbitration agreements must be customized to fit the provider’s practice needs and client population. This is an area where “one size fits all” definitely does not work well.

For more information on arbitration agreements and/or to determine if you would benefit from incorporating such an agreement into your practice, please contact your attorney at Burke Costanza & Carberry LLP or Robert F. Parker at (219) 769-1313 or parker@bcclegal.com.

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