HMO LIABILITY: Recent Court Rulings Bolster Consumer Rights
Yesterday's Wall Street Journal/California Edition took a look at several recent "key judicial rulings" in California that "promise to provide patients with significant new ammunition when they wind up in disputes with their" HMOs. "The pendulum has reached its peak and is swinging back in the other direction in favor of the insured," said Jay Taylor, who earlier this month "won the latest major court ruling that bolsters the rights" of HMO members. In that case, the state's 2nd District Court of Appeal in Los Angeles ruled that Taylor could bring a class-action arbitration against Blue Cross of California. The Journal reports that Taylor considers the ruling important "because it will allow many more health plan enrollees to pool their resources for what might otherwise be prohibitively expensive arbitration proceedings." A Blue Cross spokesperson said the insurer is appealing the ruling in state Supreme Court.
Other court rulings that have bolstered patient rights have also focused on arbitration, the Journal reports. Consumer advocates say consumers are often unaware of their arbitration rights and responsibilities. "When it comes to negotiating an agreement, individual consumers are not in the same place as large health plans' and often simply swallow whatever is written into a standard contract," said Peter Lee, attorney for Health Care Rights. The Journal reports that a June 1997 ruling against Kaiser Permanente said "HMO members can file lawsuits if they demonstrate that their health plan's arbitration system is unfair." As a result, "Kaiser earlier this year announced an overhaul of its arbitration system," changing it from an "in-house process" to an "independent system." In another consumer-friendly ruling, the 2nd District Court of Appeal upheld a lower court's ruling against Cigna HealthCare of California. Both courts ruled that a women could sue Cigna -- not for medical malpractice, which is prevented by federal law --but for "deceptive and misleading" advertising. Cigna is appealing the ruling in the state Supreme Court. In another boost for consumers' arbitration rights, Gov. Pete Wilson last month signed into law a measure "that for the first time will require health plan arbitration decisions -- and the reasoning behind them -- to be made public." Sen. Herschel Rosenthal (D-San Fernando Valley), the law's author, said it should "help protect consumers" by making the process more equitable. While the HMO industry has questioned the law's necessity, state Supreme Court Justice Ronald George "appointed a task force to conduct a two-year study of the impact that private judging is having on the state courts and the public" (Benson, 10/21).