Claim LA Labor Chief Miguel Contreras Said Killing Voluntary Arbitration Top Priority

Los Angeles area Democrats claim they refused to vote on giving HMO patients the right to go to court because Los Angeles County Federation of Labor Chief Miguel Contreras told them his top personal priority was stopping the pro-patient measure. On the final roll call, Assembly members Ed Chavez (La Puente), Paul Koretz (West Hollywood) and Gloria Negrete McLeod (Chino) ignored the pleas of a Southern California Health Net patient locked out of the court system by mandatory arbitration.

The Democrats refused to support, or to oppose, legislation in the California Assembly Health Committee that would have allowed patients seriously injured by their HMO to choose between courts and arbitration. The three “non votes” left SB 458 (Escutia), which had already passed the Senate and was up for reconsideration in the Health Committee, three votes short of passage.

Paul Koretz ultimately “added on” to the measure, after the vote was closed. He did not vote for the last roll call on the bill, but was allowed to “add on” as an “aye.” Assembly rules disallow “add on” or changed votes if the change would impact the pass/fail status of the vote. (The Assembly Health Committee did not release official votes until late afternoon on June 26th.)

The LA County Labor Federation has never taken a position against the legislation, which would give workers more choices, nor has any labor union in the state. In fact, many labor unions that are part of the Federation support the bill. The labor chief was lobbying heavily for two weeks side-by-side with Kaiser, the state’s largest HMO, to stop the legislation despite the fact that it would have given workers more choices and labor has been working to stop mandatory arbitration in employment contracts.

The only known motivation for Contreras to take a position counter to workers’ interests is the fact that union that put him in power, SEIU, has a “partnership” with Kaiser in which each helps the other quietly. For example, it was an SEIU local that cut a recent deal with Kaiser that paid unlicensed telephone call center clerks financial bonuses for not scheduling doctors appointments, not transferring calls to nurses and hanging up.

The Foundation for Taxpayer and Consumer Rights called upon Contreras to resign for betraying the interests of workers. Last week, it had written to Assembly Speaker Herb Wesson for rule changes that require members to vote when present or not be paid.

“Politicians are not paid to ‘take a walk’ when the choices of innocent constituents harmed by their HMO are at stake,” said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights. “Labor chiefs should be fighting for patients’ interests not against them. Politicians must either live with the consequences of voting against HMO patients’ interests or support patients, but they must take a stand. Not voting has become the modus operandi of corruption without consequence. The Assembly Speaker must change the rules to force those present to vote. Sickness should be the only abstention. Any politician who is present and not voting should not be paid for the day. ”

SB 458 (Escutia) allowed the choice of court only in cases of HMO interference with treatment — lawsuits that fall under California’s new HMO liability law (Section 3428 of the Civil Code). Voting in support of the measure were Wilma Chan, Rebecca Cohn, Dario Frommer, Jackie Goldberg, Virginia Strom Martin, Carl Washington, Howard Wayne.

Taking no stand (“not voting”) on the official vote of SB 458 were Ed Chavez (ring leader of the HMO opposition), Gloria Negrete-McLeod, and Simon Salinas. Paul Koretz, who voted “Yes” on the bill at a hearing last week, but was persuaded by Contreras to pull off for the final roll call, added on as an “Yes.” Helen Thompson voted “no” along with the Republicans on the Committee Aanestad, Bates, Robert Pacheco, Richmond and Zettel.

The first HMO patient to try to hold his HMO accountable under a new California HMO liability law had testified before the committee that his HMO had denied him both vital treatment for his degenerative disk disease and access to the courts.

“I now have extensive fusion of the vertebrae and spine resulting in permanent disability, which could have been avoided had I had a prompt response,” stated Warren Goold, the Health Net patient. “I did not realize when I enrolled in my health plan that I had given up my constitutional right to trial in the fine print. I started up with an employer who provided health care and they signed away that right away for me, knowingly or unknowingly. I have been asked to pay extraordinary costs, $11,000, just to file a case in arbitration because of the extreme damage. A person in my situation who collects long term disability from my employer is no position to pay that cost.”

Goold’s is the first known case under the HMO liability law, effective January 1, 2001. He filed his case about one year ago and has still not had a hearing. SB 458 follows the recommendation of the American Arbitration Association, which announced in March it would only administer voluntary health care arbitrations because of ethical concerns about the process.

The Foundation for Taxpayer and Consumer Rights announced it would be exploring a possible ballot initiative in 2004 to give patients and policyholders the choice of courts.

Consumer advocates and members of the California Nurses Association complained that problems with mandatory arbitration undermined the 2001 law establishing legal accountability of the HMO to the individual and other patients’ rights Governor Davis has touted as the toughest in the nation.

Among the problems with mandatory arbitration are its secrecy, as there is no public record of abuses revealed; the financial incentive arbitrators have to rule for HMOs to receive repeat business; the fact that legal errors by arbitrators cannot be appealed and arbitrators need not follow rules of jurisprudence; and the high cost for consumers compared to the courts.

“California is alone among the 11 states with HMO liability laws in permitted patients to be forced in mandatory arbitration,” said Jamie Court, executive director of the Foundation for Taxpayer and Consumers, which sponsored SB 458. “Californians should not be second class citizens. Patients should not have to give up their seventh amendment right to trial just to receive health coverage. Innocent patients victimized by an HMO should be able to choose the courts. Politicians who refuse to give patients choices when their harmed are abetting HMOs that deny care and access to the courts.”

Other HMO liability states have seen few lawsuits, but much deterrence to malfeasance. For instance, Texas, which has allowed the right to sue in court since 1997, has had only a dozen lawsuits.

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