HMO Arbitration System ‘Tilted’ Against Consumers, Report Finds
The arbitration system used by most of the state's managed care organizations to resolve patient disputes is "deeply flawed at the expense of consumers," according to a new study, the San Diego Union-Tribune reports. Conducted by the California Research Bureau, the research arm of the state Legislature, the report found that the arbitration system is "costly for patients," and that HMOs may not be complying with a law requiring them to notify the state of all arbitration cases (Fong, San Diego Union-Tribune, 1/12). Written by Marcus Nieto and Margaret Hosel, the report's main findings include:
State Sen. Sheila Kuehl (D-Santa Monica) requested the report. As an Assembly member last year, Kuehl saw her bill, (AB 1751), which would have prevented HMOs from "forcing patients into arbitration," die after HMOs and Gov. Gray Davis (D) opposed it (Rojas, Sacramento Bee, 1/12). Kuehl said that while a new law that went into effect Jan. 1 gives Californians the "right to sue their health plans for denial or delay of care," mandatory arbitration "effectively eliminates that right" (San Diego Union-Tribune, 1/12).
Jamie Court, executive director of the advocacy group Foundation for Taxpayer and Consumer Rights, said, "This report should convince the Legislature that patients should not have to waive their right to trial simply to join an HMO. ... With a new HMO liability law ... it's more critical than ever that patients with HMO problems not be kept out of court by forced arbitration agreements." Both Court and the report noted that other states restrict or prohibit the use of arbitration in health care disputes (Foundation for Taxpayer and Consumer Rights release, 1/11).
The report's findings were disputed by the California Association of Health Plans. Calling the report "somewhere between inaccurate and misleading," CAHP spokesperson Bobby Pena said that the authors' estimate of 300 annual arbitration cases was based on a "false assumption," since "most cases are resolved through the HMOs' grievance process with their patients." Concerning the cost to patients, he added that "in many cases," HMOs pay for all costs in an arbitration to "streamline" the proceedings. "While we don't dispute the costs of arbitration cases, the alternative -- taking the case to trial -- is far more expensive," Pena said (Sacramento Bee, 1/12). Jim Anderson, a Kaiser Permanente spokesperson, added, "We want health care dollars to be used for health care, not for litigation" (San Diego Union-Tribune, 1/12). And responding to the criticism from the Foundation for Taxpayer and Consumer Rights, Pena said, "They're backed by the trial lawyers who don't like the arbitration system" (Sacramento Bee, 1/12). To download the full report, go to http://www.library.ca.gov/html/statseg2a.cfm. Note: You will need Adobe Acrobat Reader to view the report.