Applied Radiology

Dr. Goebel has his own law offices in Huntington Beach, CA, and is the Medical Director of Oncology Services, Community Hospital of Long Beach, CA.

Traditionally, hotly contested disputes have led the adversary parties to the courtroom for trials. This has often resulted in time-consuming, expensive proceedings, the outcomes of which are frequently at odds with the purpose of the action. The analysis of medical errors undertaken by the Harvard School of Public Health found that the awards in medical malpractice actions by patients injured in New York hospitals was strongly linked to the magnitude of the disability caused by the adverse event rather than the presence of actual negligence. ¹ This tendency may lead to flawed outcomes in many cases.

Compounding the potentially flawed outcomes of many trials is the increasing number of disputes that can be litigated. According to Walter T. Fisher and Melvin C. Ury in Getting to Yes , their groundbreaking book on negotiation, "conflict is a growth industry. Everyone wants to participate in decisions affecting them; fewer and fewer people will accept the decisions dictated by someone else." ²

According to the American Arbitration Association, 90% of the people in the United States would prefer to settle disputes without going to court. ³ Because of this preference, the techniques of negotiation, arbitration, and mediation have gained favor in providing alternative means of resolving disputes; hence the term, "alternative dispute resolution" (ADR).

The judiciary has embraced ADR. The California Practice Guide on Civil Procedure before Trial advises attorneys, "before jumping into a lawsuit, consider whether the case lends itself to arbitration or other out-of-court procedures to resolve the dispute." ⁴

Types of ADR

There are various ADR procedures to consider, ^3-6 including negotiation, binding (contractual) arbitration, and judicial arbitration.

* Negotiation-- Negotiation involves direct settlement negotiations with the opposing party.

* Mediation-- Mediation is the process of settlement negotiations between counsel (for the opposing parties) when it is aided by informal evaluation of the case by a retired judge or another experienced person or a panel. Mediation is sometimes called "nonbinding arbitration."

* Binding (contractual) arbitration-- By agreement before or after a dispute arises, parties may agree to accept and be bound by an arbitrator's award. Arbitration pursuant to such agreements is known as contractual arbitration.

* Judicial arbitration-- There are some litigated cases where, despite the lack of agreement to arbitrate, by order of the court they must go to arbitration prior to the trial date assigned. In these cases, the arbitrator's award is not binding and either side may demand that the trial take place.

Relevance of ADR to the radiologist and the radiation oncologist

The radiologist and the radiation oncologist interact with many persons and entities with whom disputes might arise. It behooves them to be aware that ADR can affect them in two significant scenarios. The physician involved in a dispute might want to choose to participate in one the forms of ADR as a strategic decision to gain a better position in order to avoid costly litigation or due to unequal bargaining power.

Or, the physician may be confronted with a pre-existing duty to use ADR (usually binding arbitration). This often arises in contractual disputes in which there is a binding arbitration provision. This may be an unpleasant surprise if he or she (or the attorney) has not carefully read the contract.

Like it or not, your existence as a radiologist is probably already inexorably intertwined with ADR!

Which form of dispute resolution is best for you?

Although there is no single answer, considerable progress has been made recently in developing methods for selecting which type of dispute resolution to use in various situations.

In Renegotiating Health Care , Marcus and Dorn ⁵ give the following general principles that motivate parties to agree to choose one method of dispute resolution over another. "Disputants choose arbitration over litigation when they want to settle their disputes without the complications of a courtroom battle. They confer to the arbitrator control of both process and outcome." On the other hand, disputants choose mediation when they want the mediator to control the process but not necessarily the outcome. Finally, parties will choose negotiation when they want to control both process and outcome.

Unfortunately, many cases arise in which there is no binding arbitration clause and in which there is no agreement between the parties to use ADR as opposed to litigation or taking no action at all (stonewalling). Liang ⁷ has developed a model of assessing when ADR is economically efficient in comparison to no action or formal adjudication. This model can be useful in several hypothetical non-malpractice situations familiar to radiologists.

In the first hypothetical situation, he analyzed a dispute between two recently merged hospitals concerning which one would get to have the sole MRI scanner that would be purchased for both facilities. In that case, mediation was found to be the best fit because it allowed for a creative resolution of the issue while improving communication between the parties.

On the other hand, in the hypothetical case of an older radiologist who felt that his reputation suffered after his exclusive contract had not been renewed, the analysis suggested that a combination of mediation and arbitration would be optimal. In this hybrid form of ADR, if mediation fails, then an advisory opinion could give the radiologist and the hospital an objective assessment regarding the conflict should the matter proceed to formal adjudication. Such an opinion could also help the physician's reputational concerns by formally stating that his competence was not an issue in not renewing his contract. ⁷

Medical malpractice cases

The previous hypothetical cases involve potential contractual disputes. Medical malpractice, on the other hand, involves the alleged negligence of the radiologist. Frequent claims against radiologists include failure to diagnose cancer and complications of procedures.

Many hospitals, such as Duke Medical Center, have adopted medical malpractice ADR programs. ⁶ In these programs, execution of the ADR agreement by the patient is voluntary, and failure of the patient to execute the agreement has no effect on the availability or delivery of services to the patient. As of 1997, 17 states have statutes that address arbitration of medical malpractice claims. ⁸ California has adopted formal recommendations for implementation of Malpractice ADR Guidelines in California Code of Civil Procedure Section 1295. ⁹ Inclusion of specific language waiving a jury trial prevents these agreements from being disregarded as adhesion ("take-it-or- leave-it") contracts. ¹⁰

Usually, the specific ADR procedures adopted are indicated clearly in the arbitration agreement, and a copy of the specific ADR procedures adopted is made available to the patient. An example of specific ADR procedures is the Health Care Claim Settlement Procedures of the American Arbitration Association. ³

The implementation of a medical malpractice ADR program by a radiologist's hospital can substantially impact the process and outcome of medical malpractice suits against him or her. ADR is becoming used increasingly in imaging cases involving the misdiagnosis of cancer.

A recent review, conducted on LEXIS and WESTLAW, evaluated how often ADR influenced the outcome in 105 breast cancer malpractice lawsuits. Of the 58 cases in which plaintiffs were compensated, 37 were resolved using ADR rather than trial verdicts. These plaintiffs' compensations totaled $9,381,483. Of the 6 suits against HMOs, 5 were resolved by ADR. ¹¹

ADR was used in 28 of the 39 cases in which a palpable breast mass was not biopsied, including 19 of the 25 cases in which the plaintiff discovered the mass herself and 5 of the 8 cases in which the woman was younger than 40 years old. It was also used in 3 of the 4 cases involving screening mammography and in 10 of the 11 cases in which mammography did not lead to the diagnosis, including all 4 cases of misreading and 4 of the 5 cases in which mammogram reports were not delivered promptly.

Plaintiffs' disabilities from the alleged negligence in these cases was scored using Medical Error Analysis ¹ as applied to breast cancer. The plaintiffs' temporary or permament disabilities were evaluated and given a score from 1 to 8. The disability scores were grouped descriptively as a function of plaintiff compensation for evaluable cases in the trial and ADR groups. The distribution of compensation as a function of disability score was similar in both groups. ¹¹

It is in a radiologist's self-interest to have an ADR program established in the hospital's medical malpractice system if one is not in place, or to fully understand the hospital's medical malpractice ADR program if one already exists

Caveat: You can be surprised by existing ADR agreements

Contracts function as private law between the contracting parties. They are usually enforceable in court barring improper formation, an acceptable defense, or breach by the opposing party. ADR clauses in contracts signed by radiologists with hospitals, HMOs, and other parties are part of the contract. Once signed, contracts are often not able to be changed unless both parties agree in writing. Often, the only way out of a contract may be cancellation by the radiologist. This option, if available, may require giving several months' notice during which services must continue to be rendered to avoid allegations of breach of contract and possible allegations of patient abandonment. ¹²

This happened in the case of a large medical group in Southern California that went bankrupt recently; the group had over 500,000 patients capitated to them from health plans. These patients were, in turn, contracted to specialists, including radiologists and radiation oncologists using a "boiler-plate" contract containing a mandatory ADR clause and a 90-day notice requirement for cancellation without cause. When the medical group stopped paying many of the specialists, they found that they "de facto" had no recourse to obtain their payments; and many worked "for free" until the medical group declared bankruptcy. ¹³

Another recent case involved the recoupments by Blue Cross of California of approximately $30,000 for radiation management services by a Southern California radiology group. According to the California Radiological Society (CRS), "the vast majority of radiation oncology groups bill for weekly treatment management by using a '5' in the unit box on the claim, indicating 5 fractions of treatment." Blue Cross maintained that they had been reimbursing each CPT code 77430 thus billed for 5 weeks of treatment instead of 5 days of treatment--and they wanted a refund! The case was submitted to arbitration and the arbitrator found in favor of Blue Cross, much to the chagrin of the CRS, who had expended in the aggregate approximately $50,000 in legal fees. ¹⁴

ADR also is potentially susceptible to accusations of bias. ¹⁵ To avoid this taint, which in the past has resulted in arbitration having to be repeated, it is necessary to avoid the appearance of financial interest by the arbitrator--for example, by being repeatedly retained by one of the parties. In one such case, the arbitrator's prior experience working on behalf of the hospital created an impression of possible bias. ¹⁶

On the other hand, some patients may be unpleasantly surprised to find that they are bound by arbitration agreements that they did not themselves actually sign if they were represented by an individual acting on their behalf (such as an employer for an employee, a parent for a child, or a spouse for a partner). ^17-19 So the potential risks and benefits of ADR are shared by all parties.

The formalities of a contractual arbitration program cannot be allowed to delay or impede the expeditious processing of claims. If they are, the plaintiff might be able to wrest the case from a normally mandatory contractual arbitration process and instead litigate it in court. Such was the case in Engalla v. Permanente Medical Group , a radiology malpractice case in which a lung cancer was missed on an x-ray examination, resulting in the patient's tumor becoming more advanced--and inoperable--at the time of the diagnosis. The plaintiff sought arbitration under the self-administered Kaiser contractual arbitration plan, which promised in its consumer booklet that all three arbitrators would be in place within 60 days. Unfortunately, nothing was done for 144 days, at which time Engalla died. There were frequent and possibly deliberate delays, prompting the California Court of Appeals to conclude that there was actionable fraud. ^8,20

Conclusion

Alternative dispute resolution has become an integral part of radiology and radiation oncology. It offers the potential to protect radiologists from unfair, expensive, and protracted litigation. But it also carries its own potential risks in uncertainty of outcome, loss of autonomy, and the possibility of being bound by unwanted ADR provisions in contracts. The best way to make ADR work for a radiologist or radiation oncologist is to be aware of the possibility of disputes and vigilant for circumstances in which the need for ADR may spring up unexpectedly. AR