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SCOTUS: Class Arbitration Upheld in Physician-Insurer Case

Margaret Dick Tocknell, for HealthLeaders Media, June 12, 2013

"It is a sad commentary that it took a decade for Dr. Sutter and other New Jersey physicians to exercise the dispute mechanism allowed by their contracts," said MSNJ General Counsel Melina Martinson in a statement.

"A timely class-arbitration would have allowed them to have their payment disputes resolved more expeditiously and cost-effectively. The decision is welcome news to physicians in New Jersey and all who are concerned with the reducing the cost of medicine in this country."

What remains to be seen is whether the Supreme Court's decision will give a boost to "the medical profession's efforts to address unfair corporate policies of large health insurers that are bad for patients and physicians," as contended by the AMA in a press statement.

In a blog posting providing analysis of the decision, Mayer-Brown, a Chicago-based law firm with an international practice in employment and benefits, termed the ruling as "narrowly written," and noting that the Supreme Court decision holds that courts lack authority under the Federal Arbitration Act "to vacate an arbitral award authorizing class arbitration when the arbitrator's decision is based on an arguable effort to construe the arbitration agreement and the parties had agreed that the arbitrator should decide whether the arbitration agreement allows class-wide arbitration. Under such limited circumstances, the Court held that the FAA's limited standard of review of arbitral awards precludes a court from correcting any mistakes in interpreting the agreement."

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