San Francisco Chronicle

The Legislature left some unfinished business last year when it passed a bill allowing patients to file a claim for damages against their HMOs — but not necessarily in a court of law.

Starting January 2001, a new law allows patients to hold HMOs liable for “substantial harm” caused by delay, denial or modification of recommended treatment. But despite many impressions to the contrary, the law does not give patients the right to take their cases to court. In most cases, they are limited to binding arbitration because of provisions in membership agreements.

A bill, AB 1751, by Assemblywoman Sheila Kuehl, D-Encino, would restore the full legal rights of patients with damage claims against HMOs by not limiting them to settlement through arbitration. While arbitration may be a valid means of setting disputes for many, it may not be for all for reasons of possible secrecy, cost, bias or delay. Patients should have the right to choose the form of legal recourse they prefer.

The aim of the law permitting patients to seek damages was to make HMOs more accountable for bad medical decisions. But it stopped short of providing the biggest incentive for HMOs to do the right thing — the right to a jury trial and due process.

In Texas, where patients have the right to either sue or seek arbitration, only two lawsuits were filed in the first three years of the more open system.

HMOs claim that the right to sue will lead to a flood of lawsuits that will lead to higher health-care premiums. That has not proved to be the case. What happened in Texas was that HMOs more often followed doctors’ recommendations, which is what patients were after in the first place.

Last year’s legislation did not complete the job of giving patients the legal rights to which they are entitled. Support for Kuehl’s bill, which is scheduled for a hearing in the Assembly Judiciary Committee today, will ensure those rights without eliminating the use of arbitration in health care disputes.