Mediation involves little risk, since a party can walk out at any time and move on to arbitration or litigation. And, since it's a flexible process, mediation can take place before, during or even after other procedures, such as arbitration or litigation, have been employed. Arbitration is the next level up from mediation. It is mostly used to avoid costly litigation or when mediation fails to result in agreement. The major risk is that arbitration decisions can almost never be appealed.
Arbitration is much more formal than mediation, and each side usually is represented by a lawyer.
As in a court case, proper notice to the parties must be given, rules and procedures must be followed, document requests are allowed, witnesses are common, and a stenographer may be hired to transcribe the proceedings. Although this formality drives up costs, some businesses favor arbitration because it's final. If you need a mediator or arbitrator, you may want to contact the National Health Lawyers Association, which runs an ADR program specifically geared to resolving disputes involving physician contracts, employment matters and other managed care issues. Over 35 of the dispute resolvers are physicians, nurses and hospital administrators with expertise in key areas of health care. That means the person who helps resolve your dispute is likely to have the sophistication and background to understand the issues you are facing.