Magazine article Dispute Resolution Journal

HEALTHCARE: Waiver of the Right to Arbitrate

Magazine article Dispute Resolution Journal

HEALTHCARE: Waiver of the Right to Arbitrate

Article excerpt

The 6th Circuit held that a party's letter sent prior to litigation, stating that it is not interested in arbitrating "at this time" was merely posturing and did not constitute a waiver of the right to arbitrate.

Wellmont Health Systems and John Deere Health Plan entered into a medical services agreement under which Wellmont provided medical services to JDHP members. In early 2001, the parties entered into a supereeding contract containing an arbitration clause. After an audit, JDHP determined that Wellmont had overbilled for rehabilitation services and it notified the company that it would seek to recover the overpayments and would reduce its future payments to Wellmont for rehabilitation services. In response, Wellmont wrote to JDHP advising that it would like to "set a date to discuss alternatives for dispute resolution" and was "open to a range of options, including mediation, possible arbitration...." JDHP replied several months later, stating, "[W]e do not at this point agree to arbitration or other alternative dispute resolution," and reiterated its demand for full payment of all overpayments. Subsequently, Wellmont filed an action against JDHP in federal court; in response JDHP moved to compel arbitration and stay the litigation. The district court denied JDHP's motion to compel reasoning that the company had waived its right to compel arbitration by the statement in its letter to Wellmont declining "at this point agree to arbitration. …

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