KAISER PERMANENTE: ALTERS ARBITRATION PROCESS
Kaiser Permanente, California's largest HMO, said yesterdayThis is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
that "it will adopt an advisory panel's recommendations" and
"abandon the unique, self-administered arbitration process that
it has used for more than two decades for resolving medical
malpractice claims and benefits disputes." The move comes in
reaction to the California Supreme Court's "harsh" criticism of
the company's procedures, the Los Angeles Times reports. The
advisory panel was created after the state Supreme Court found
that the HMO had "manipulated a supposedly neutral arbitration
system" in a case brought against it by the family of a deceased
patient that claimed the HMO had "purposely stalled arbitration
of a malpractice claim they made" (Olmos, 1/6). According to the
AP/Contra Costa Times, the changes in the arbitration system
would apply only in California; Kaiser members in Colorado and
Hawaii are the only others "bound by contract to use arbitration"
REVAMPING THE RULES
The Wall Street Journal reports that while "Kaiser has long
defended its system as quicker and more equitable than the
courts," recently "critics have contended that Kaiser members may
face undue delays in getting cases heard" (1/6). Most other HMOs
"refer disputes to an independent arbitration company," but
Kaiser runs its own system, reports the Contra Costa Times. Dr.
David Lawrence, Kaiser's chair and chief executive, said that
Kaiser would now "pay the cost of arbitration if the complaining
policyholder agrees to a single arbiter instead of a panel of
three" (1/6). At a press conference, Lawrence noted that the new
system would be "fair, impartial for all involved and ... timely"
(Los Angeles Times, 1/6).
The "Blue Ribbon Advisory Panel," created by Lawrence in
July 1997, released several recommendations after studying ways
to improve the medical malpractice arbitration system of the HMO.
In order to guarantee fair and prompt resolution of medical
malpractice claims, Kaiser agreed to: the creation of an
independent administrator to manage its arbitration system; a
permanent advisory committee to the HMO and the independent
administrator; prompt appointment of the neutral arbitrator who
controls written decisions and has certain costs covered by
Kaiser; expedited procedures for patients with terminal
illnesses; creation of a mediation program; and regular audits
and evaluations of the arbitration program (release, 1/5).