David Lichter has served as counsel in two antitrust and credentialing litigation matters in federal court. The first concerned exclusion of one physician group from a hospital as the result of an exclusive contract with another physician group. The second concerned the credentialing and exclusion of a different physician group at a number of regional hospitals, the Board’s actions with respect to the Hospital’s bylaws, and the operation of off-campus outpatient clinics by the physician group operating within the hospital.
He previously represented two plaintiffs in separate Qui Tam overbilling/double-billing actions against area medical providers; the government joined in one of those actions, and both were settled successfully. He also represented a physician-founded company in a substantial settlement involving the back and front-end design and (failed) launch of a sophisticated healthcare website, which involved the retention of a computer forensic expert.
We asked him how his expertise informs his approach on the American Arbitration Association® Healthcare Panel.
Q. What types of healthcare disputes do you typically handle as an arbitrator or mediator?
I handled a wide variety of healthcare disputes as a mediator, but, since 2024, I have limited my practice to arbitration and work as a special master. Here are some examples of the variety of matters I typically handle, which cut across Medicare Advantage and Commercial insurance, as well as Medicare and Medicaid:
I have been involved in many Payor-Provider disputes in which the dollar amounts at issue range from seven to nine figures. These include, among other subjects, allegations of improper recoupment or sequestration of payments made by an insurer to a hospital system, contentions that a payor has misapplied or improperly introduced a wide range of policies and guidelines contained in provider manuals and administrative guides to deny payment on a variety of claims, alleged misapplication of federal statutes (including but not limited to Section 340B and Medicaid) and regulations to change the manner in which reimbursements are made, as well as numerous medical necessity disputes. The cases often involve an analysis of DRGs, MCGs, and coding issues and not infrequently require a deep dive into the drafting and the adoption of the particular policy or guideline along with an examination of how the guideline or policy is applied to classes of patient claims.
Payor-Provider cases sometimes include counterclaims alleging overpayment on thousands of patient accounts. On some occasions the dispute necessitates the issuance of a bifurcated award, resulting, for example, in a partial award interpreting the parties’ agreements or one which finds liability on certain sample claims and then requires extrapolation to the entire cohort. Such cases occasionally require a detailed order selecting the proper sampling methodology.
Other cases involve a more complex contract analysis and how the parties’ agreements apply to issues including level of care, length of stay, placement delay, discharge planning, and medical necessity, and which party bears the burden on such issues.
I have also arbitrated a number of physician practice disputes which centered on the nature of the agreements between the parties and their respective rights arising thereunder in the context of a practice breakup or the termination of one or more physician partners. Additionally, I have served as the arbitrator in a number of healthcare employment matters, which include topics ranging from peer review, disciplinary proceedings, and internal board investigations and appeals to allegations of defamation and race and sex discrimination.
Q. What drew you to ADR work in the healthcare space? What do you value most about serving as a neutral on the AAA’s Healthcare Panel?
I became involved in healthcare matters as an AAA arbitrator after receiving a smattering of such cases while serving on the Commercial and Employment panels. Someone suggested that I ought to apply to the Healthcare panel, and since joining that panel approximately 10 years ago, I have been fortunate to serve on an ever-increasing number of healthcare arbitrations, which now constitute the majority of the matters on which I serve.
I most value the quality of the panelists with whom I sit and the excellent lawyers in this space who appear before me and my co-panelists.
Q. How has your judicial experience shaped the way you approach healthcare arbitration or mediation?
I have never served as a Judge.
Q. Are you noticing any emerging issues or trends in healthcare cases coming to arbitration?
More healthcare cases are filed every year. Additionally, cases seem to be settling at a lower rate than previously, although that may simply be my personal experience. Certain cases will often cluster around a new statute or regulation or a change in its interpretation (Section 340B is a good example).
Q. What advice do you have for parties preparing for arbitration or mediation in complex healthcare disputes?
Be sure you have the proper expertise in this space (including some of the niche areas) before proceeding on a given matter or affiliate yourself with counsel that does. A number of the issues we address are highly specialized and can trip one up if they are not prepared. Additionally, be very selective about the experts you hire. You need to understand their experience, how deep they will dive, and the nature of their analysis and preparation. I have seen more than one expert taken apart in cross examination when their methodologies or depth of inquiry did not pass muster. Parties should also consider not repeatedly using the same expert on a given topic. Claims charts for each sample claim are very helpful when an arbitrator or panel needs to decide each sample claim; it enables the decider to better follow along and record their thoughts as the arbitration proceeds.