Frequently asked questions for Neutrals

FAQs

Whom should I list as a reference?

The best references are attorneys who have appeared before the neutral in arbitration, mediation, or a medical staff proceeding. Without revealing specifics about prior cases, those attorneys can attest to the neutral’s actual performance, knowledge of health law, and style and approach to dispute resolution. If a neutral cannot obtain these references, a satisfied client or others familiar with the neutral’s professional ability, character and expertise may provide useful information.

If I am appointed to serve as a sole arbitrator, how do I manage funding?

How much of a deposit to ask for at any given time depends on the size and complexity of the claim. In a small and simple case, an Arbitrator may be able to reliably estimate how much work will be required and request a single deposit. The fees required to resolve a complex case can be impossible to predict early on. The claim may settle right after an Arbitrator or panel is chosen; extensive pre-hearing proceedings may be required followed by a lengthy hearing; or the case may get resolved somewhere in between these extremes. The best practice is to schedule a series of deposits with the understanding that projected amounts and deadlines may need to be adjusted as the claim progresses. Since a case may settle or be withdrawn at any time, it is critical to have sufficient funds in escrow to pay accrued fees and expenses throughout the life of a claim. Settlement agreements rarely provide for payment of arbitration expenses, and attorneys are often reluctant to go back to their clients for more money. So insist that the parties keep up with deposits even if they are optimistic about reaching an agreement. AHLA will fully refund any unused deposits.

If I am appointed to serve as a panel Chair, how do I manage funding?

Rule 3.5 sets forth the Chair’s responsibility for managing the arbitration process as well as presiding at the hearing. The Chair should therefore collaborate with the panel members to estimate expenses and request appropriate fee deposits at the appropriate times. The Chair should also work with the panel members to monitor their hours in order to be sure that the funds on deposit adequately compensate each of the panel members for their work. Fees can become contentious issues for the panel members. They may not concur on how much time is necessary or appropriate to spend on certain tasks such as reviewing briefs or drafting awards. A panelist whose hourly rate is much lower than that of the other panel members may resent receiving less compensation for performing the same work. The Chair should strive to address these issues as early in the process as possible in order to maintain a harmonious working relationship among the panel members. If the deposits are insufficient to pay invoices, the Chair should seek consensus about how to allocate the funds. If panel members cannot agree on the allocation, the Administrator will implement the majority opinion if there is one. If the panel members are split three ways, the Administrator will retain the funds until a majority or consensus emerges.

What happens if I submit an invoice for more than the funds currently on deposit?

When a neutral submits a reasonable invoice for more than the amount of funds on deposit, the Dispute Resolution Service attempts to collect the additional amount needed to make the neutral whole. This can be time-consuming as it often requires repeated follow up emails or phone calls. If persistence does not pay off, all or part of the invoice may remain unpaid. The Dispute Resolution Service will not do any of the following:  

• waive all or part of the 18% administrative fee;  
• deduct more than a party’s fair share from the funds it has deposited to compensate for another party’s failure to pay*;  
• continue to invoice a party who is evidently unwilling or unable to pay; or  
• engage a debt collection agency.
  

Since obtaining deposits after work has been performed is often difficult or impossible, the Dispute Resolution Service strongly discourages neutrals from taking action unless sufficient funds are on hand to pay their anticipated expenses.

* For example, the neutral requests both parties to deposit $5,000. Party A complies and Party B does not. The neutral submits an interim invoice for $4,000. Unless the parties agree otherwise, Party A is responsible for only half of this invoice ($2,000). Unless the Dispute Resolution Service is able to collect at least $2,000 from Party B, it will approve payment of only $2,000, less the administrative fee.

Will the parties see my invoice?

The Dispute Resolution Service does not provide invoices to parties unless they ask to review them, but invoices are provided upon request.

Does AHLA collect an administrative fee on travel time?

Yes. But if a neutral bills at a discounted rate, AHLA reduces its administrative fee proportionately. For example, if a neutral's normal hourly rate is $400 and she charges 50% ($200 per hour) for travel time, AHLA retains only half of its normal 18% administrative ( 9%.).*  AHLA fully reimburses neutrals for out of pocket costs such as airfare, mileage, or lodging. 

*Since the Case Management System automatically deducts 18% from billable hours, AHLA will enter 50% of the travel time as billable hours and 50% as an expense. This will result in a net administrative fee of 9%.

Should a Neutral Sign a Business Associate Agreement?

A business associate agreement is a contract to govern the disclosure and use of protected health information entered into by a "covered entity" (such as a health plan or health care provider) and a "business associate," as those terms are defined in regulations implementing the U.S. Health Insurance Portability and Accountability Act of 1996.[1]

Neutrals are not business associates because they do not perform delegated functions on behalf of a covered entity. Arbitration and mediation are not routine operational or administrative functions that a covered entity could itself perform. Neutrals do not stand in the shoes of either party to mediation and arbitration proceedings.

Moreover, neutrals are not engaged to perform legal services for a covered entity. An agreement to arbitrate or mediate is a mutual agreement by all party litigants to appoint a neutral or to vest an administering organization with authority to appoint a neutral.[2] The neutral serves the parties' shared interest in resolving litigation privately and confidentially. To be effective, a neutral must be, and be perceived as, independent, i.e., having no allegiance or attachment to a single party or party representative.

An attorney who serves as an arbitrator or mediator should make it clear to the parties that he or she is not performing legal services for either party, and there is no attorney-client relationship between them.[3] Because mediation and arbitration are not legal services, neutrals need not be, and often are not, lawyers.[4] The work they perform, therefore, is not and cannot be considered "legal services" within the definition of a business associate, or otherwise.

A covered entity's demand for a business associate agreement puts a neutral in an untenable position. Refusing to sign could lock the neutral into a legal battle with the covered entity from which he or she would be hard pressed to emerge with the covered entity's trust and respect. Conversely, if the neutral accedes to the covered entity's demand, even though an agreement is not required, this can create a false impression that the neutral is partial, having assumed the role of a business associate, or that an attorney-client relationship exists between the neutral and the covered entity. Moreover, an arbitrator could not negotiate the terms of a business associate agreement because negotiating would require ex parte contact with the covered entity, which is strictly forbidden.[5] Similarly, it is hard to imagine how a mediator could negotiate without appearing to have made concessions, which would compromise his or her neutrality.[6]

In conclusion, the Dispute Resolution Service recommends against parties asking neutrals to sign business associate agreements and against neutrals agreeing to such requests.

[1] See 45 C.F.R. § 160.103; 65 Fed. Reg. 82,462, 82,476 (Dec. 28, 2000).

[2] This is often done under the auspices of a dispute resolution administrator such as the American Health Lawyers Association.

[3] See ABA Model Rules of Professional Conduct R. 2.4(b)"

[4] Many of the neutrals on our roster do not have a law degree. Physicians with mediation training can be highly effective in resolving some of the most sensitive health care disputes.

[5] See The Code of Ethics for Arbitrators in Commercial Disputes, Canon III, available at https://www.healthlawyers.org/dr/Pages/default.aspx.

[6] See Model Standards of Conduct for Mediators, Standard III (A), available here.