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Arbitrating Medical Services Prompts Controversy

Tuesday, August, 16, 2011

Arbitrating disputes has become a commonplace way to resolve disagreements, providing a quicker and less expensive means of reaching a resolution.  When it comes to medical malpractice arbitration, however, the American Arbitration Association has issued a caveat: the association does not believe that a binding arbitration clause should be required of patients before they can access care.  The American Arbitration Association is the largest arbitration trade organization in the world.


Arbitrating Sometimes Required By Insurance Companies


Despite the AAA's view of the practice, some doctors have little choice but to require their patients to sign binding arbitration agreements.  Jake Sunderland, speaking for the state insurance commission in Nevada, reveals the reason why: "There are a couple of malpractice insurance companies that require their doctors to do binding arbitration, or else they penalize them with higher premiums."


Jean Sternlight is a professor of law at the University of Nevada, Las Vegas; she also heads the Saltman Center for Conflict Resolution.  In her view, "There are lots of doctors who do it [arbitration], there are lots of hospitals that do it . . . They're especially common in institutions.  The bigger the institution, the more likely they are" to require customers to sign binding arbitration clauses.


These clauses allow health companies to better predict business expenses because they eliminate the prospect of endless court appeals.  This leads to a better estimate of legal costs for dealing with a malpractice claim.