In 2009, the Texas Legislature signed into law Texas House Bill 2256. The bill provides a procedure for mediation of out-of-network health benefit claim disputes. The law now gives patients the option to mediate when they are “balance-billed” by their insurance company for services provided by out-of-network facility-based physicians like radiologists, pathologists, and neonatologists. Balance billing occurs when a physician bills a patient for the difference between what the physician charges for a service and what an insurer pays the physician for that service. When a physician is not in-network for an insurer, there is no contracted payment rate that the physician has agreed to accept from the insurer so the insurer can pay what is deemed appropriate and the patient is billed for the difference. Read more. Texas HB 2256, however, requires the mediator to report “bad faith” mediation to the Insurance Commissioner or the Texas Medical Board. Under the statute, “bad faith” mediation means: failing to participate in the mediation; failing to provide information the mediator believes is necessary to facilitate an agreement; or failing to designate a representative participating in the mediation with full authority to enter into any mediated agreement. Read more. This reporting provision has not been well received by mediation commentators. Susan Schultz, Program Director of the Center for Public Policy Dispute Resolution at the University of Texas School of Law has stated, According to this section, the mediator will need to evaluate whether a party has engaged in “bad faith mediation” and, if so, to report the conduct to the appropriate state agency for the imposition of an administrative penalty. For mediators, this requirement is bad news with alarming consequences. Let’s look for example at two tenets of mediator conduct: impartiality and confidentiality. As the mediator is weighing (role more often associated with decision-maker) whether one party is engaging in bad faith mediation, how is that affecting the mediator’s impartiality? How can the mediator report bad faith mediation without breaching confidentiality? Susan Schultz, Bad Faith Mediation; Bad News for Mediators, Texas Mediator (Winter 2009). It is too early to know the implications of HB 2256 “bad faith” provisions in the mediation case law in Texas. The bill, intended to solve the “balance billing” issue, in practice seems to conflict with the well-established mediation principles of impartiality and confidentiality , which goes against the spirit of the Texas ADR Act. We welcome your comments about “bad faith” mediation. Technorati Tags: law, ADR, arbitration

By Brett Goodman Yesterday, Major League Baseball (the MLB) rejected a proposed television deal for the Los Angeles Dodgers, a move that sends the McCourt divorce proceedings back to the drawing board and highlights the complications that can arise from a lack of proper mediation. The highly publicized divorce of Frank and Jamie McCourt, former joint owners of the Los Angeles Dodgers baseball franchise, had finally reached an agreement on June 17 of this year contingent upon the television contract being accepted. Yesterday’s rejection of the deal, however, suggests mediation may need to occur. “Commissioner Selig’s letter of rejection is not only a disappointment,” said Frank McCourt through a statement, “but worse, is potentially destructive to the Los Angeles Dodgers, and Major League Baseball. Accordingly, we plan to explore vigorously our options and remedies with respect to Commissioner Selig’s rejection of the proposed FOX transaction and our commitment to protect the long-term best interests of the Los Angeles Dodgers.” The Dodgers franchise has been in financial dire straits as of late. If payroll cannot be met by June 30, the MLB may be forced to take over the team for sale. However, given the past year’s Texas Rangers club going from bankruptcy to an appearance in the World Series in the same year, worry within the team is not high. First baseman James Loney said on the matter, “I think the distraction is just hearing about something you can’t really control and don’t have any input in. It’s a situation that’s happened, and I think for us, we should just go out and play baseball.” However the dispute is resolved, through mediation or other means, the case is an excellent real world example of the headaches that can be avoided through effectively mediating as early as possible. Given the confidentiality of mediation as well as the promise of avoiding lengthy and expensive litigation, greater efforts to reach an agreement early on in the divorce proceedings could have avoided public embarrassment for the McCourts as well as more certainty in Dodger nation. Technorati Tags: law, ADR, arbitration Brett Goodman is a summer intern at Karl Bayer, Dispute Resolution Expert. Brett is a J.D. candidate at The University of Texas School of Law. He holds degrees in Finance, Mathematics, and Spanish from Southern Methodist University.

Texas Governor Rick Perry recently signed into law HB 274. The bill’s history is here and the HRO analysis is here. The bill is effective September 1, 2011 and directs the Supreme Court of Texas to create rules for the early dismissal of “causes of action that have no basis in law or fact on motion and without evidence.” The bill also allows trial courts to award attorney’s fees to a prevailing party on the court’s granting or denial, in whole or in part, of a motion to dismiss. Stay tuned. Technorati Tags: law, ADR, arbitration

The Dallas Bar Association, Collaborative Law Section will be hosting a CLE entitled “How to Incorporate Interest-Based Negotiation into Your Practice” on Thursday, June 30, 2011 at noon (CST) at the Belo Mansion. Speakers will be John Lande, (via teleconference) Director of the LLM Program in Dispute Resolution the University of Missouri School of Law, and Camille Milner, North Texas collaborative Lawyer, mediator, and frequent speaker on developing and expanding interest-based negotiation. Non-members must pay a fee for CLE in order to receive MCLE credit. For more information, contact Teddi Rivas by email at trivas@dallasbar.org or phone (214) 220-7400. Find out more details here.