HMO Bill Would Ensure Right To Trial Over Disputes

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Los Angeles Times

SACRAMENTO — Millions of Californians who are members of HMOs would be assured the right to a court hearing in disputes with their providers under legislation proposed by Assemblywoman Sheila Kuehl (D-Santa Monica).

The Patients Right to Trial Act, proposed last week, attempts to end a common health maintenance organization practice of making new patients agree to arbitration in lieu of a court hearing. Arbitration escapes public scrutiny and the basic due process rights of a trial.

“Patients should not have to sign away their right to trial just to get health care, and today they do,” said Jamie Court, an advocate for the Foundation for Taxpayer and Consumer Rights, which sponsored the bill.

Court said arbitrators have a financial incentive to find in favor of the HMOs that hire them, and that keeping cases private sets up the system for abuse. Court’s foundation is largely funded by trial lawyers.

Kuehl co-authored legislation passed last year, which will take effect next year, permitting patients to recover financial damages from HMOs for injuries that result from poor care. Her new bill, AB 1751, would guarantee their right to go to court in the first place.

The California Chamber of Commerce opposes the bill, maintaining that arbitration is a fast and effective means of resolving disputes.

Last year, the Legislature passed a package of HMO reforms ranging from a new Department of Managed Care to a requirement that prescription coverage include birth control.

The limitations of binding arbitration gained notoriety when Kaiser Permanente patient Wilfredo Engalla died in 1991 while awaiting review of his case. After being told for years he had chronic allergies, Engalla found out he had lung cancer.

It took five months for Kaiser to appoint an arbitrator. By then, Engalla was dead. Yet time, it took an average of two years to appoint an arbitrator to such cases, Kaiser records show.

Engalla’s daughter, Aina Engalla Konold, made a tearful appeal last week in support of the bill, saying that Kaiser had dragged its feet.

“It was not until after his death that we fully realized how biased against us the system was,” Konold said. “No one really knows how many other families had suffered as ours had, because it was secret.”

The Engalla family charges that Kaiser‘s delay in reviewing the case cost them damages they might have been awarded by the courts. Kaiser spokeswoman Kathleen McKenna said the Engalla case was the impetus for a revamping of the company’s arbitration system. An independent administrator now resolves most cases within 18 months, she said.

Kaiser is not alone in requiring trial waivers. Most major HMOs now include the clause, Court said. AB 1751 would affect any health care plan issued after Jan. 1, 2001.

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