HMO arbitration reform bill fails — L.A. labor leader is blamed

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The Sacramento Bee

Sponsors of a bill that would have allowed patients to avoid mandatory arbitration in certain HMO disputes blamed powerful labor boss Miguel Contreras on Wednesday for defeating the measure.

The head of the Los Angeles County Federation of Labor AFL-CIO acknowledged that he had urged Assembly Health Committee members whom the unions have supported to kill the bill on Tuesday.

Contreras said he opposed the measure — SB 458 by Sen. Martha Escutia, D-Montebello — because the federation’s rank-and-file members are satisfied that the arbitration process is working.

But supporters of the bill said no union in the state — including the Los Angeles federation’s 360 unions — formally opposed the bill.

Jaime Court, executive director of the Foundation for Taxpayers and Consumer Rights, accused Contreras of “free-lancing” and taking a position counter to workers’ interests.

The measure would have allowed patients to bypass arbitration and proceed to court when an HMO interferes with doctor-recommended treatment and substantial harm results.

Most HMOs in the state require patients to submit disagreements to binding arbitration as a condition of medical coverage. Advocates contend that the system is stacked against patients because HMOs are more familiar with the process and deal regularly with arbitrators.

Escutia’s bill was vigorously opposed by the health maintenance industry, including Kaiser-Permanente, the state’s largest HMO.

Industry officials predicted that if the measure passed, trial lawyers would exploit emotional cases to win large jury awards that would drive up health-care costs for all patients.

But Court countered that because of the AFL-CIO’s labor-management partnership with Kaiser, Contreras deprived his members of the right to chose between arbitration and the courts.

Court said Contreras “sold out” his members for workplace concessions from Kaiser — an assertion that Contreras denied.

“Our concern was not Kaiser or improving the chances of trial lawyers getting multimillion-dollar awards,” Contreras said. “We did what was best for our members.”

Kathleen McKenna, a spokeswoman for Kaiser, said union members — like other Californians — are facing rising insurance premiums and will benefit from holding down the cost of health care.

The measure was defeated on an 8-7 vote by the Assembly committee. Court said the bill would have passed if two Los Angeles County Democrats who abstained from voting — Ed Chavez and Gloria Negrete McLeod — had supported it.

Paul Koretz, another Los Angeles County Democrat who was elected with union support, abstained initially but voted in favor once the bill’s defeat was assured. Contreras said he urged all three Assembly members not to vote for the measure.

Court said supporters of HMO reform now plan to mount an initiative drive for the November 2004 election.

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