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Today’s Conflict Management

An ounce of prevention is worth a pound of cure

By Sidney Welch, JD, Deborah C. Hiser, JD, E. Haavi Morreim, JD, PhD, and Corey M. Weideman, JD

Perhaps the only thing most people seem to agree on today is that there’s a lot of disagreement in Washington, DC, and the consequence has been gridlock and inaction. The health care industry and physicians are not immune from this syndrome. This article describes several scenarios that could benefit from effective alternative dispute and conflict resolution. The situations might play out as follows:

Scenario 1–Employment and Contract Issues

Pediatric gastroenterologist, Dr. Kidd Belly, sold his practice to a large multi-hospital system, where he also became an employee. He hoped to spend more time with patients and less time on administrative work. The hospital, in turn, needed a pediatric gastroenterologist due to a nationwide shortage of pediatric subspecialists. In spite of the mutually beneficial relationship, myriad problems developed.

As an employee, Dr. Belly was required to use hospital-provided office and nursing staff. However, every few days he saw a different set of staff, causing confusion as Dr. Belly had to search for equipment in his repeatedly rearranged exam rooms. Also, the staff ended each workday promptly, leaving matters undone, such as entering information into patients’ charts. The hospital, however, considered the problem to be a familiar adjustment during a physician-practice acquisition, and thought the kinks would smooth themselves out. Eventually, the hospital assigned a single set of nursing and office staff to work regularly at Dr. Belly’s office. The hospital said it would have done so earlier had it known how troubled Dr. Belly was about the situation.

Such disputes could be effectively resolved with a conflict management structure. A hospital-physician liaison, written into the employment contract from the outset, could help the physician navigate the hospital system. The liaison could identify the appropriate department or person to talk to when a problem arises, and serve as a negotiation coach, advising the physician on how to explain problems and negotiate a mutually beneficial resolution. Many of Dr. Belly’s frustrations resulted from not knowing where to get help.

Scenario 2–Medical Staff and Employment

As problems boiled over, Dr. Belly lost all patience, screaming at office and hospital staff on several occasions. Nursing complaints prompted the medical staff to dub him “disruptive,” after which the hospital threatened to terminate his employment.

Hospital-physician disputes also arise when medical staff bylaws overlap or conflict with a physician’s employment or professional services agreement. For instance, even if an employment agreement references bylaws provisions that establish prehearing rights, those prehearing rights may not apply because the parties intended to execute an “at-will” employment agreement. Disputes stemming from contract v. bylaws clashes include territorial issues, peer review, due process, exclusive contracts, and medical malpractice coverage.

Both sides have incentive to resolve issues harmoniously at the earliest possible stage. Hospitals and physicians can avoid protracted litigation, and physicians can avoid adverse reports to the state medical board or NPDB. Building conflict resolution into the employment agreement from the outset, as in-house mediation or other ADR, can maximize the parties’ chance to preserve their relationship.

Scenario 3–Compliance and False Claims Act

Dr. Belly had to transition to the hospital’s billing software. This software requires that all information be complete in the patient’s chart and that the chart be “locked” before a claim is submitted to the payer. Due to incompatibilities between the hospital’s system and Dr. Belly’s own prior EMR software, patients’ medical records had inaccuracies. Additional errors, created by the constantly rotating staff, were not always immediately spotted. Dr. Belly thus delayed completing and “locking” his records.

Hospital administrators hesitated to contact Dr. Belly about the problem because they did not want to exacerbate the increasingly contentious employment relationship, and instead submitted claims for his services, even as they realized a potential compliance issue. A former hospital billing employee filed a health care fraud com plaint with the federal government. A young federal prosecutor, out to make a name for himself, made high-dollar demands to resolve the matter.

With civil penalties as high as $11,000 per false claim, plus treble damages, ADR can be a very attractive alternative. In fact, False Claims Act cases are resolved increasingly through mediation. Hospitals can avoid potentially catastrophic financial liability, time and expense, not to mention the negative publicity of a trial. They can also preserve confidentiality if the mediation occurs before the complaint is unsealed. Reciprocally, the government can recover financial payments. Both sides may benefit.

ADR and conflict resolution are relevant to most health care practices and physicians today.

Sidney Welch, JD, is a partner at Kilpatrick Townsend & Stockton, LLP, Atlanta. She chairs the ABA Health Law Section’s Task Force on ADR and Conflict Management. Deborah C. Hiser, JD, is a partner at Husch Blackwell, LLP, Austin; E. Haavi Morreim, JD, PhD, is a professor in the Department of Internal Medicine, University of Tennessee Health Science Center, Memphis; and Corey M. Weideman, JD, is an associate trial lawyer at Duane Morris, LLP, Houston. For a list of references, please contact

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