Judge’s Ruling Raises Questions Over Kaiser’s Arbitration Clause
Thousands of Los Angeles County employees who enrolled in Kaiser Permanente plans online might not be bound by the insurer's traditional binding arbitration clause, a recent ruling by Los Angeles Superior Court Judge Emilie Elias suggests, the Los Angeles Daily Journal reports.
Health insurers generally use binding arbitration to settle various disputes, such as medical malpractice and other expensive claims. These complaints go before paid arbitrators as opposed to judges or juries.
The judge's ruling stems from a lawsuit brought by Guillermo Arce of Pasadena who sued Kaiser for denying coverage of autism treatments for his three-year-old son.
Arce contends that he never saw or signed an arbitration agreement when he enrolled through the county's Web site.
Elias ruled that the computer screens that Arce clicked on did not have the correct information and proof of signature.
In denying Kaiser's motion to compel arbitration, Elias concluded that even if Arce signed the online agreement, it did not meet the standard for binding arbitration.
No Appeal Filed
The time period to appeal the ruling expired on Dec. 15.
Kaiser spokesperson Jim Anderson said the company did not appeal the ruling because its lawyer thought the result was "specific to the facts of this case" and would not affect others.
Anderson said other state court judges have ruled differently on what constitutes a valid arbitration clause.
Bryan Liang, executive director of the Institute of Health Law Studies at the California Western School of Law in San Diego, said it is surprising that Kaiser did not appeal a ruling that affected its arbitration clause but added, "I am sure it was strategic thinking on their part ... If they lost on appeal then that's a huge piece of case law that's going to be cite in every trial court in California."
Impact of Ruling
Liang said the ruling is "definitely significant for all L.A. County employees who went through the same process," because trial courts are less apt to reach opposite rulings from the same facts if a case stands uncontested.
However, Greg Pimstone, an attorney who represents the health plans, said, "In these kinds of cases decisions on the validity of arbitration provisions will frequently be limited to the particular facts."According to the Daily Journal, the scope of the ruling could depend on "how many county workers encountered the same online enrollment process that the judge in this case found deficient" (George, Los Angeles Daily Journal, 1/7). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.