AHLA's Speaking of Health Law
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AHLA's Speaking of Health Law
A Look at AHLA’s New Commercial Arbitration Rules
Effective September 1, 2023, AHLA’s Dispute Resolution Service (DRS) has developed newly revised commercial arbitration rules. The members of the DRS’ Rules Committee discuss how the DRS operates, why the committee decided to revise the rules, and the specific changes made to the rules. The members of the DRS’ Rules Committee are Gary Qualls, Partner, K&L Gates LLP, Ed Brooks, Partner, McGuireWoods LLP, Chris Sabis, Member, Sherrard Roe Voigt & Harbison PLC, and Hon. Joel Richlin, United States Magistrate Judge, United States District Court for the Central District of California. Ed recently wrote an article for Health Law Connections about the new rules.
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<silence> This episode of A H L A speaking of health law is brought to you by A H L A members and donors like you. For more information, visit american health law.org.
Speaker 2:Welcome to this podcast on the newly revised American Health Law Association, or ALA's commercial arbitration rules. My name is Gary Quals . I'm the moderator for today's podcast. I'm a healthcare litigator with k and l Gates. I've handled healthcare litigation and arbitration matters for 30 plus years. Uh, have been a certified arbitrator for about the last decade, and I'm currently the chair of ALA's Dispute Resolution Service Counsel . As I mentioned, the purpose of this podcast is to discuss ALA's, commercial arbitration rules that a group of us have just updated and otherwise revised. I wanna take a moment to recognize the extensive efforts by certain individuals in this rules rewrite process. Specifically, I wanna recognize Jeff Drucker, the Senior Director of the Dispute Resolution Service , and also want to recognize and thank each of the panelists who are about to introduce themselves, all of whom are council members, and , uh, we're members of this Rules committee. So I'll now ask each panelist to introduce themselves. Let's start with Ed Brooks.
Speaker 3:Thanks, Gary. Uh, ed Brooks here. Uh, hello everybody. Um, I'm a partner with McGuire Woods in , uh, Chicago. Uh, I've been doing , uh, healthcare commercial litigation , uh, representing payers and providers for , uh, over 30 years. I'm also an A H L A and AAA neutral , uh, like Gary , uh, handle matters around the country , uh, in courts and arbitrations. And I've served on several A H L A committees , uh, including this one , uh, to revise the rules. Appreciate the , uh, introduction
Speaker 2:Be said . Uh , Chris Sabu .
Speaker 4:Thank you, Gary. And hi, everyone. My name is Chris Sabi . I'm a member at ARD Rowe Boyton Harbison in Nashville, Tennessee. I focus my practice on litigation and government investigations, mostly in the health healthcare sector. I also do open records cases and , uh, do a lot of pro bono civil rights work. Uh, before I joined , uh, Sherrard, oh, and , and of course, a D r I provide services as both a mediator and an arbitrator. And before I joined ard , uh, I was , uh, an assistant US attorney in the middle district of Tennessee, where I focused on civil healthcare fraud and white collar fraud.
Speaker 2:Thanks , Chris. And , uh, last but not least, the honorable judge Joel Richland.
Speaker 1:Thanks, Gary. And here everyone. I'm Joel Richland. I'm a United States Magistrate Judge for the Central District of California, and I am a longtime healthcare litigator. Um, before joining the bench, I represented both payers and providers in all kinds of healthcare disputes. Most recently, for many years, I was the general counsel and head of litigation of a national hospital system, and in that capacity, I supervised and led hundreds of litigation and arbitration matters around the country. Uh , great to be here today.
Speaker 2:Thanks, judge Richland . Um, so I wanna spend a second on what is the Dispute Resolution service for A H L A? First of all, we're a fully administered dispute resolution service with a great staff composed of Jeff Trucker, whom I previously mentioned, who's the senior director. Also, Kareem Bryce , manager of Dispute resolution service, as well as Robin Carter, the case administrator for the service. And a few points about , uh, ALA's dispute resolution service. The fees are very reasonable and often end up being lower than competitive dispute resolution services. The administrative fees for A H L A are a percentage of the arbitrator's fees and are taken out of the arbitrator's fees. Um, the A H L A arbitrator candidates lists are customized based on the areas of health law at issue and other relevant factors. Uh, the lists are also balanced, for example, for payer disputes. Uh, the panel list will include arbitrators or proposed arbitrators who have represented payers and providers. And on that note, I also wanted to mention that , uh, in the context of amending these A H L A rules, we had representation from payer's counsel and provider's counsel . So now about the revised rules , uh, judge Richland , I wanted to start with you. Can you describe the background on why the committee undertook these efforts and why the committee made the revisions that it did?
Speaker 1:Yeah. Um, I think, you know, the , the rules are incredibly important and , uh, the A H L A rules hadn't been revised in about two years, and we had seen other dispute services come out with customized payer provider rules. And so I think there was a , a desire from , um, from , uh, litigants for us to look at that and see if H L A should develop its own payer provider rules. And so, as you mentioned, Gary, we had it , it was really nice to be on this committee and have both , uh, provider lawyers and payer lawyers. Um, ed and I have been on the opposite side of the same cases, so we've gone head to head , uh, representing other sides. And I think that kind of diversity of opinion was really helpful , um, to really get different perspectives in this group. So, you know, the goal was to look at some of the specialized rules out there and see if we wanted to develop our own. And so we started going through , um, ALA's commercial rules. And I think what we saw was that the H L A rules already are , um, healthcare focused enough to incorporate and accommodate payer provider disputes without having a whole nother set of rules. So I think what we were able to do is to incorporate specific provisions and the rules that , um, more easily facilitate payer provider disputes along with all kinds of healthcare disputes that the H l a dispute resolution service was already handling every day . So let me take it to sort of get , start getting into some specifics here about , uh, the different types of changes that were made to update these rules. And let me toss it to Ed first. The first one we'll start with is the desk arbitration Rule 1.2. Ed, do you wanna talk about that?
Speaker 3:Sure. Happy to. And, and before I jump into there , um, judge, you mentioned we'd been across each other when we were in the <laugh> when you were , before you were on the bench. And, and , and it was a great , a great , uh, situation. And now that you're on the bench <laugh> , I'm gonna be extra nice. Um, but , uh, so yeah, rule 1.2 , um, is it was a new rule that we added, and it's for desk arbitrations. Um, we realized, and you know, as judge , uh, Richland said that, you know, we wanted to refresh these rules , um, and we didn't have a desk arbitration option. So in short, it's pretty simple. Um, as you'll see in the theme throughout this discussion, that we tried to, you know, address gaps and make things better. But also the overarching goal was to keep these rules simple. Um, and so what we did is we added desk arbitration, and it simply means that regardless of the amount and controversy , uh, the parties can agree to do a arbitration on the papers, meaning no witnesses , um, uh, and or discovery. Now, it does have , uh, an out for , uh, extraordinary circumstances. The arbitrator can allow a witness or some discovery , but that's, you know, only in extraordinary circumstances. The idea is to keep the cost down. And , and regardless of the amount of controversy , uh, there can be a , um, arbitration on the papers ,
Speaker 1:Right ? Yeah . And I think that provides an efficient option for the parties. Um, so the next rule, do you want to talk about filing a claim 2.1, ed?
Speaker 3:Sure. Uh , happy to, thanks. Um, so rule 2.1 was already in existence, but we amended it , um, and , and we amended it to expressively provide that in reimbursement disputes. Um, even if they arise under multiple contracts , um, they can be filed as a single claim . I mean, the idea, you know, unless the arbitration, of course, unless the arbitration agreement says otherwise, the idea being that we don't get wrapped up into different contracts. We wanna try to be efficient here. Uh, and, and one, one claim, or one arbitration can deal with multiple contracts.
Speaker 1:And , and I'll just add that I think this is something that was already happening under the rules. And so, you know, a lot of the changes that we're gonna talk about, some of them are really just formalizing and documenting the way that the rules were already being applied. So the experienced practitioners already understood these things, and I think these rules clarifications just really formalizes, it makes it clear , um, especially to folks who don't litigate these cases every day like we do.
Speaker 3:So we wanna go on to , uh, the next rule , um, which would be, I think with , uh, maybe Chris can discuss , uh, rule 3.5.
Speaker 4:Uh, yeah, thanks, ed. Uh, we can talk about here , uh, rule 3.5 , uh, dealing with the appointment of the arbitrator. The , the most significant change here , um, is that unless a party requests a majority vote of the panel before a ruling , uh, the chair now may resolve any procedural or evidentiary disputes , uh, including disputes and discovery. So, for example , uh, the chair may rule on a motion to alter the scheduling order, or on a motion to compel unless a party requests otherwise , uh, beforehand. And basically what the rule does is it resets the default here , uh, to the most streamlined deficient process that is one arbitrator on a three-judge panel , uh, being able to handle these types of disputes. Um, and again, a party can still request a vote of the full panel , uh, but absent , uh, that request this rule, we believe should provide for faster rulings and promote consistency in those rulings. And then I can also address , uh, a , a change in section four , um, dealing with arbitrators. Uh, the amendments to section four actually do a number of things. Um, first they clarify that the arbitrator has the authority to decide his or her jurisdiction. Uh, again, I don't think this is a real change, it's just a clarification , uh, that we wanted to, to enshrine. Uh, it clar the changes clarify that , uh, the type of , uh, they clarify the type of potential sanctions , uh, for a party's failure to comply with the rulings of the arbitrator. Uh, so for example, it specifies that the arbitrator can , uh, make adverse inferences , uh, can exclude evidence , uh, and can make an assessment of costs against the party. Um, the , uh, changes also , uh, specifically address the arbitrator's authority to postpone hearings , uh, manage discovery and issue enforcement orders. Uh, and basically the prior version of the rule provided the authority to sanction to stay or dismiss proceedings, but it had little detail on the arbitrator's ability to manage the arbitration. And in looking at , uh, the, the rules , uh, the committee felt that some additional detail without limiting to the dis the discretion of the arbitrator , uh, would be an appropriate and helpful change.
Speaker 1:Great , great. Thanks, Chris. And I don't know if others feel the same, but, you know, my take on a lot of these changes to the powers of the arbitrator was, you know, I think there's a real benefit to just clarifying the authority as whichever side you're on, and whether, you know, whether you agree or disagree with what the arbitrator is saying. You , you know, I always just feel like it's a , it's a waste of money to fight about whe whether the arbitrator has the power to do it. Uh , you know, I , I at least want, we want efficiency, we want resolution. You're gonna lose some arguments, you're gonna win some arguments. But, but I think, you know, the benefit here of clarifying these rules is preventing fights about who has authority to do what, at least making that clear. I don't know how others feel about these changes.
Speaker 4:Yeah, I , I , I think that's right, your honor. I , I think it's just , uh, some additional , uh, some additional , uh, detail to add , uh, uh, some artistic vari similitude as Gilbert and Sullivan would call it , uh, to , uh, to the defining the role of, of the arbitrator , uh, in certain instances.
Speaker 1:Let's move on to , uh, to section five, the pre-hearing process. Um, ed, do you wanna start us off just sort of talking about some of the changes there?
Speaker 3:Yeah, absolutely. Thanks, judge. Um, I know you, you like the , the 5.6 clarification, so I'm gonna jump in and start with 5.4 . 5.4 , um, does have some new elements , um, and , uh, rule 5.4, the change that we made in that rule. Um, and , and, you know, this is all about the pre-hearing , uh, conference in 5.4 . So , um, the , the , the status conference, the , the change that we made in that rule was we embedded in a, in the rule itself, a , uh, a checklist for payer provider disputes. Um, and , and in addition to the , um, elements that the rule always already requires the parties to discuss, there's a, there's a actual spreadsheet that when you click on it , uh, in the rules, you get the , um, uh, and embedded , uh, uh, checklist for what I'll call the things that are unique to payer provider disputes. And the parties are required to discuss those things. So for those of us who have been involved in these kinds of disputes a lot, you know, you , you , you, what's important are the ability for both sides really to be on the same page with what, what claims are we talking about? How do we find them ? What , what is the , you know , what does the claimant recover , um, et cetera , et cetera . And , you know, the , the payer, the insurance company is always trying to find the claims, always trying to, you know, make sure they've got the right claim and, and , and that sort of thing. Um, so the checklist really is, is detailed. It requests things like the 10 , the provi , uh, other provider information, enroll, the information, patient name, insurance ID number, dates of service, et cetera , uh, denial codes, that sort of thing. And so it's a requirement to discuss those things , uh, prior to the , the , uh, initial conference. And that's, that's 5.4 , um, 5.6 , um, uh, there was a change there and there was a lot of discussion around this rule. And , and , and Judge Richland, maybe you can, you know, add, add your your , your thoughts on that.
Speaker 1:Sure, sure. I think you know, five , so 5.6 is dispositive motion. And so dispositive motions are always a touchy issue. And depending on, you know, what side of the dispute you're on and which side of the aisle you may, you may favor or hate, just positive motions. Um, and , and again, I think, you know, what I, what I'm happy with is that this group ca had all sides of dial represented and sort of fought it out to come up with a rule that hopefully is balanced for all sides. And , and, you know, my takeaway here of what we were able to do is, again, just sort of clarify the standard. And so what we did is try to make it a little more clear when you could or could not have a dispositive motion. And , and from my view, no matter which side you're on, that's gotta be a good thing because you're spending less time and money fighting about is a dispositive motion appropriate, and either, either you're gonna have it or it's gonna get denied. And , um, I'm sure Ed will agree, you know, I've , I've been involved in just so many fights, extensive briefing and even hearings about whether the panel is going to entertain a dispositive motion. And again, that's just a waste of time, even if you don't want the dispositive motion, I , I'd rather there just be a decision one way or the other. So , um, so I think that's , uh, what we, what we tried to get to without taking sides on it, just sort of making it more clear. And any other thoughts on that?
Speaker 3:Yeah, no, I, I think the , yeah, the key change in that is, you know, unlike other , uh, administrative , administrative bodies, you know, the, the rule that we crafted really says you need only show , um, that if the motion is successful, it will, you know, narrow the case, not, not show that you have to have, you know, likelihood of success. So I think that's a big change, and it's, it's , I think it's helpful. I think a lot of people hopefully would agree with that. Um, so yeah , the next rule is 5.5, and I'll just briefly comment on that. We didn't change that one, but I think it's worth mentioning that I think , um, I , I think it's probably the consensus among the group, because I remember we talked about this, that it's important , um, for under these rules that we don't tie the arbitrator's hands , um, with, you know, a limit on depositions or discovery. So the rule is the same as it was, which is permitting discovery that is relevant to the claims, and it's really , uh, up to the arbitrator , uh, to do what's right for a fair resolution of the claim. Um, so we left, we left that one the same way. Um, judge , are there any other, well , go ahead.
Speaker 1:I , I agree with you, ed. Um, you know, I think, I think the key, the important point about 5.5 is there is no limit on depositions. It is left up to the case and left up to the arbitrator with some of the other dispute resolution services. What they were doing with payer provider rules is they were imposing certain limits on discovery. And I think , um, you know, litigants in the community on both sides, were hesitant to agree to that. So , um, so I think that this rule is different. Um, and, and the only other thing I , I would add to sort of wrap up section five, just going back a little to , uh, that pre-hearing checklist, you know, I think the pre-hearing checklist, again, is a good example of something that was happening in practice and that experienced practitioners and payer provider disputes all understood was something , uh, sort of a meet and confer on data exchanges was something that experienced practitioners all understood and utilized. And, you know, in that checklist, it's just a starting point and it's discussion point. It's, you know, the parties aren't gonna agree on everything on there, and you don't have to use everything on there, but it, it requires a discussion about everything on there. Um, and so again, we, we think hopefully it'll just facilitate the process and clarify, you know, a practice that really had been, had been happening , um, um, and so hopefully helpful more so to new practitioners in that area. Um, so why don't we move on to section seven final awards . Chris ,
Speaker 3:Uh , judge, can I just make one comment before we go there? Um, it's worth noting that there were several other rules in , uh, section five that were changed . And without going into 'em , it's worth noting. Um, there we added , uh, uh, rules for consolidation and joinder , uh, in 5.11 and 5.12 . Um, and , and , uh, a rule 5.1 , uh, we added for , uh, post appointment amendments , uh, um, adding new patients or dates of service , uh, unless the arbitrary finds it impractical. So I think that's worth mentioning. And then 5.3 , uh, some added sanction language . Um , sorry , I didn't mean to interrupt you . I just wanted to raise those .
Speaker 1:No , appreciate that. Uh , seven final words , Chris.
Speaker 4:Uh, well , uh, with regard to section seven, the changes are not major , uh, but they're certainly worth noting. Uh, one , uh, don't get , uh, freaked out if you see that there's no longer a confidentiality provision in section seven, that provision is now in section five. Uh, the arbitrations are still confidential. We just felt that the , uh, confidentiality provision was more appropriate in section five . Uh , then in section seven , uh, the other significant change , uh, is that the , uh, new Section seven , uh, makes it explicit that a H L A may extend the time for issuing an award , uh, due to a lack of payment. Uh, I , I'm sure that there's no problem with, with this, with anyone who's listening to this podcast, but it just, we just wanted to make it, it it explicit in the rules that if there is an issue with a delayed or or missing payment , uh, that, that A H L A may extend the time for the arbitrator to , uh, issue an order , uh, until that payment is made.
Speaker 2:Thanks, Chris. And , uh, I would ask the , um, attendees, first of all , um, ed, if you could mention , uh, to the audience , uh, about the recent article that you authored about the newly revised rules.
Speaker 3:Oh, thanks, Gary. Well, it's, it's the October , uh, November Health Law connections. There'll be an article about all the hard work that everybody did , and I was, you know, privileged to be able to write up a summary . And , you know, for those listening to this, it , it's, it , it kind of tracks what we talked about in case, you know, you wanna have it in writing and , and take a look at it . It'll be in that , uh, uh, new Connections magazine.
Speaker 2:Thanks, ed. And , um, does anyone else , uh, have any parting comments that they wanted to make on any sections of the rules or any aspects of the new rules?
Speaker 4:Uh, yeah, yeah, Gary specifically , um, I , I know that, that , uh, ed and, and the judge already discussed this, but I , I wanted to note that, that I also really like the, the changes in rule 5.6 , uh, and also the discussion that was had , um, on the, on the rules committee about that. I think that, you know, the cornerstone is efficiency there and, and being able to handle the, the issue of, of motions in the most efficient manner possible. I think , uh, I'm hopeful will be helpful to , to the parties and a H L A arbitrations. Um, and then just more generally, I just wanted to, to thank the other members of the committee. I'm, I'm relatively speaking probably the least experienced person here, and , uh, I'm new to the, to the , um, uh, to the committee. And , uh, being able to work with, with such experienced and, and, and knowledgeable folks has really been a pleasure. And there, there were a lot of meetings involved, but they were interesting meetings and the discussion was useful. And , um, I'm just really, really impressed with the, the quality of the , uh, of the interaction we had, and I think it's reflected in the product.
Speaker 2:Well, thanks Chris. And , uh, I certainly appreciate everyone's efforts , uh, in this regard. So, some parting thoughts that I had , um, is that we hope that the audience will read the new A H L A arbitration rules. We hope that you'll incorporate those into your contracts and deal documents by including a H L A as a dispute resolution service provider in such documents and designating the A H L A arbitration rules to apply. And we would also ask that you consider designating A H L A as a dispute resolution service provider in posts dispute submissions where the parties decide to arbitrate after the dispute has already arisen instead of going to court. That's always an option and won't fo to remind , to remind folks of that. Um, so I'd like to again, thank the panel and the H l A staff for all of their work on these rules or visions, and we hope that you have a good day.
Speaker 5:Thank you for listening. If you enjoy this episode, be sure to subscribe to a H L A speaking of health law wherever you get your podcasts. To learn more about a H L A and the educational resources available to the health law community, visit American health law.org .