(a) The contractor and the Department of State Health Services (department) may agree to mediate a claim through an impartial third party by including a contractual provision to do so at the time of entering into a contract, or, absent a contractual provision, by mutual agreement.
(b) The mediation shall be governed by the provisions of the Governmental Dispute Resolution Act, Government Code, Chapter 2009.
(c) The department and the contractor shall select an impartial third party that is acceptable to both. The impartial third party must:
  (1) possess the qualifications required under Civil Practice and Remedies Code, §154.052;
  (2) be subject to the standards and duties prescribed by Civil Practice and Remedies Code, §154.053; and
  (3) have the qualified immunity prescribed by Civil Practice and Remedies Code, §154.055, if applicable.
(d) A mediation conducted under this section is confidential in accordance with Government Code, §2009.054.
(e) A final settlement agreement signed by the department under this section is subject to or exempted from required disclosure in accordance with the Public Information Act, Government Code, Chapter 552.
(f) Unless the contractor and the department agree otherwise, the costs of the mediator shall be divided equally between the parties, and each party shall be responsible for its own costs, including costs of document reproduction requested by such party, attorney's fees, and consultant's or expert's fees.
(g) To facilitate a meaningful opportunity for settlement, the parties shall, to the extent possible, select representatives who are knowledgeable about the dispute, who are in a position to reach agreement, or who can credibly recommend approval of an agreement. Any limitations on the settlement authority of the representatives participating in the negotiations must be disclosed by the parties before mediation begins.
(h) Any settlement reached during the mediation must be put in writing and signed by representatives of the contractor and the department. The agreement must describe any procedures that must be followed to secure final approval.
(i) The final settlement agreement must be documented in writing and signed by representatives of the contractor and the department with authority to bind the respective party. If the settlement does not resolve all issues raised by the claim and counterclaim, the agreement must specifically identify the issues that are not resolved.
(j) If mediation does not resolve one or more of the claims to the satisfaction of the contractor, the contractor may file a request that the claim(s) be referred to the State Office of Administrative Hearings pursuant to Government Code, Chapter 2260, as to the claim(s) that is not resolved. The request for referral must be filed according to the timetable described in §4.18 of this title (relating to Timetable for Negotiation and Mediation).

Source Note: The provisions of this §4.24 adopted to be effective September 16, 2010, 35 TexReg 8369