To Make All Forced HMO Arbitration Records Public
The Foundation for Taxpayer and Consumer Rights (FTCR) and the Health Administration Responsibility Project (HARP) filed an official petition with the director of the California Department of Managed Health Care (DMHC) today calling for full public reporting and disclosure of all documents and discovery obtained in forced HMO arbitrations.
A California Research Bureau Report last month found that 80% of patients in HMOs are forced into arbitration as a condition of health coverage and yet HMOs appear not be meeting basic reporting requirements, under current law, to the state about their arbitration resolutions.
The petition, which DMHC Director Zingale must respond to within 30 days, begins,”The recent failure of health plans to report even basic information about their arbitrations with patients suggests the need for rules guaranteeing open disclosure. Quality of care violations are too often hidden from public view because there is no public record made of health plan binding arbitrations, as there would be if the cases went to court. It is the duty of the Director of the Department to assure that health plans arrange for same quality health care for all patients as provided under the Knox Keene Act, whether or not the patients are subject to binding arbitration or can go to court . Documents produced in health plan arbitrations are vital for the public and the Director to view in order to make a determination about quality of care violations at health plans. The new Rule 243.1 of the Judicial Council greatly limits the conditions under which records will be sealed by courts, and it is unlikely that matters affecting public health, such as misconduct of managed care organizations, would be allowed to be sealed. Health plans should not have the benefit of secrecy for misdeeds simply because they utilize binding arbitration agreements.”
“This will be the first significant test of the new HMO Czar’s resolve to put a public spotlight on quality of care violations by HMOs,” said Jamie Court, executive director of FTCR. ” Forced arbitration should not be a curtain that protects HMOs from public scrutiny. There is no reason why the public should be denied information about HMOs simply because patients are forced into arbitration as condition of health coverage rather than allowed to go to court.”
“This information is all available currently for cases that are litigated in court and it would be absurd to allow HMOs to suppress this information by contract,” said Dr. Harvey Frey, Esquire, director of HARP.
The proposed rule is:
(a) All health plans shall provide to the Director of the Department of Managed Health Care, within 30 days of completion by decision or settlement, all documents relating to all arbitrations and litigations with patients, including but not limited to written decisions, deposition testimony, expert testimony, the record of the proceedings and all documents produced in discovery.
(b) The Director shall make public, in the Department’s reading room and on the Internet, all records that, in the Director’s determination, meet the qualification of 2001 California Rules of Court 243.1
( c) Unless confidentiality is required by law, court records are presumed to be open.
Petition Requesting Adoption of Regulation:
We, Jamie Court of the Foundation for Taxpayer and Consumer Rights and Harvey Frey of the Health Administration Responsibility Project, of 1750 Ocean Park Blvd Ste 200 Santa Monica, CA 90405 and of 552 12th Street, Santa Monica, CA 90402, pursuant to Gov. Code Sec. 11340.6 request that the Department of Managed Health Care adopt a regulation. The substantial terms of this regulation would be to require health plans to disclose to the public all documents involved in their binding arbitrations with patients, including all deposition testimony, witness testimony, and documents produced in discovery. Authority for the Department of Managed Care to adopt such a regulation is found in Health and Safety Code section 1569.30. Attached to this request is a copy of the proposed regulation.
The regulation proposed does not repeat any other law or rule having similar effect.
The regulation proposed is necessary for the following reasons:
The recent failure of health plans to report even basic information about their arbitrations with patients suggests the need for rules guaranteeing open disclosure. Quality of care violations are too often hidden from public view because there is no public record made of health plan binding arbitrations, as there would be if the cases went to court. It is the duty of the Director of the Department to assure that health plans arrange for same quality health care for all patients as provided under the Knox Keene Act, whether or not the patients are subject to binding arbitration or can go to court. Documents produced in health plan arbitrations are vital for the public and the Director to view in order to make a determination about quality of care violations at health plans.
The new Rule 243.1 of the Judicial Council greatly limits the conditions under which records will be sealed by courts, and it is unlikely that matters affecting public health, such as misconduct of managed care organizations, would be allowed to be sealed. Health plans should not have the benefit of secrecy for misdeeds simply because they utilize binding arbitration agreements.
The Department is required to make public every document not specifically made confidential by law. No prohibition exists on release of information related to grievances, lawsuits, settlements, civil penalties, or any other matter of public record.
Since part of the department’s responsibility is preparing HMO ‘report cards’, a rule forbidding the release of the name of the HMO involved in arbitration would be inconsistent, and opposed to the overall mandate of the department to advance the welfare of enrollees.
Other regulatory agencies, such as those regulating physicians and attorneys, routinely publish or make available data on wrongdoing of and penalties imposed on licensees.
Health and Safety Code 1373.21 addresses reporting of arbitration decisions explicitly.
1373.21. (a) requires that an arbitration award be accompanied by a written decision that indicates the prevailing party and the amount, relevant terms, and reasons for the award.
Subdivision (c) allows the department to demand copies of that complete arbitration decision for purposes of administering the law.
Subdivision (b) requires plans to also provide the department with redacted copies of the decisions, to be made available to the public upon request. These must include the amount, relevant terms, and reasons for the award, and the name of the arbitrator, but must exclude the names of the enrollee, the plan, witnesses, attorneys, providers, health plan employees, and health facilities.
Subdivision (d) forbids the department from releasing information identifying a person or entity whose name has been or should have been redacted, if it got that information pursuant to subdivision (c).
However, subdivision (e) says that nothing in the section precludes the department, or any plan or person, from disclosing information contained in an arbitration decision if the disclosure is otherwise permitted by law.
In addition Health and Safety Code 1341.5(a) requires the director, as a general rule, to publish or make available for public inspection any information obtained by the department, unless availability or publication is contrary to law.
Any information presented in a court in the course of petitions for review, confirmation, or vacation of the arbitration award, which are not sealed by the court, are matters of public record, and thus should be allowed to be disseminated by the department or anyone else. (Again, new Rule 243.1 of the Judicial Council greatly limits the conditions under which records will be sealed by courts, and it is unlikely that matters affecting public health, such as misconduct of managed care organizations, will be allowed to be sealed.)
Similarly, any information received from an enrollee, such as an unredacted copy of the written decision, or discovered materials, not using the coercive power of subdivisions (b) and (c), should be freely transmissible.
Even if there was an enforceable confidentiality clause in the settlement or arbitration, that could bind only the parties and their attorneys, no one else, and certainly not an arm of the government. (Unimart v. Sup. Ct., (1969) 1 Cal. App. 3d 1039, 1045)
Especially relevant is Health and Safety Code 1368.02(c)(3)(B) which directs the Patient Advocate to compile an annual publication, to be made available on the department’s Internet website, of a “quality of care report card” for health care service plans.
A ‘report card’, by definition, would rate each health plan by name on several criteria. It is inconceivable that such a report card would omit to mention grievances, settlements, penalties, lawsuits, and arbitrations, as evidence of a plan’s grossest non-compliance with department requirements. There is nothing in the law that would prevent listing grievances, settlements, penalties and lawsuits. It would be an anomaly to interpret section 1373.21 to forbid mention of arbitrations.
Arbitration is a choice made by the health care service plan and imposed on its enrollees. If the law allows or requires the department to provide information about lawsuits, it would be unconscionable to allow the licensee’s choice of forum to frustrate that intent, and to interfere with the Department’s responsibilities of oversight and protection of the public. While arbitration may resolve issues between plans and enrollees, it in no way binds non-parties such as the department which has administrative responsibilities to all enrollees and the public.
DMHC should also be able to demand any papers submitted or discovered by any party, and not just the arbitrator’s decision, which may not accurately reflect them. The laws outlining the duties of the director, and giving him the powers to accomplish those duties, would reasonably authorize such oversight. And, to read the law narrowly, there is nothing in it which says that the department may not disseminate information obtained other than through the reports specified in HSC 1373.21.
While the enrollee may be entitled to privacy of his medical records, there is no such statutory right for regulated health care service plans.
Further insight can be obtained by seeing how other state agencies handle similar problems.
Business and Professions Code 800 requires the agencies regulating medical professionals to maintain a file on each licensee containing records of criminal convictions, judgments, settlements, or arbitration awards over some dollar amount, disciplinary actions, and public complaints. It states that the information in the file is to be confidential, unless it is a matter of public record. However, everything listed is public record, except for unsubstantiated public complaints. So it is publicized. In the case of physicians, the Medical Board periodically sends out to every physician in the state, unrequested, a list of all licensees punished, with details of the nature of their offenses.
Similar information concerning nursing homes, attorneys, etc. is widely disseminated. This makes it clear that there exists a firm public policy of warning the public about the wrongdoing of state licensees. Any ambiguity in the statute should be interpreted so as to advance this public policy.
Pursuant to Gov. Code section 11340.7, we expect to hear from the Department within thirty (30) days.
Dated: _____________________ Signed:____________________________