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A state court in Florida held that a party who voluntarily submits its claims for resolution in a state-sponsored alternative dispute resolution forum, knowing that the particular process offers few of arbitration’s traditional procedural safeguards, does not have a valid due process claim.
In Baycare Health System, Inc. v. Agency for Health Care Administration, --- So.2d ---, 2006 WL 3040661 (Fla. Dist. Ct. App. Oct. 27, 2006), Baycare and Health Options disputed over the payment of certain hospital bills. Baycare had provided care for patients insured by Health Options for a period of time after a contract between the parties had expired, and Health Options paid an amount significantly less than the amount Baycare billed for these patients.
Baycare then filed a claim with Maximus CHDR, an organization contracted by the Agency for Health Care Administration (AHCA) to resolve medical billing disputes. Maximus issued a decision unfavorable to Baycare. As a result, Baycare filed suit in Court, alleging that the Florida statute authorizing parties to resolve health care insurance claim disputes in a nonjudicial forum, Fla. Stat. Ann. § 408.7057, deprived it of due process protections.
However, the Court disagreed and affirmed Maximus’s decision in favor of Health Options. The Court noted that only state action, and not private conduct, is subject to due process scrutiny. Davis v. Prudential Sec., Inc., 59 F.3d 1186, 1190 (11th Cir. 1995). In this case, no state action required Baycare to submit its dispute to Maximus.
The Court held that “the key to whether an alternative dispute resolution process requires due process protections rests upon whether the process is voluntary or involuntary.” Baycare voluntarily choose to send its claims to Maximus, knowing that there were few procedural safeguards in the process created by the state to resolve the health payment claims. Additionally, Baycare had the option of filing suit in court but chose the alternative dispute resolution forum.
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