Opinion Editorial by Jamie Court, FTCR

Sacramento Bee Editorial Page

The Bee’s March 26 editorial “Ill-suited reform” opposed AB 1751, which would guarantee the right of HMO patients to choose between a trial or private arbitration. The Bee’s position ignores the powerlessness of patients in the forced arbitration system, which dramatically differs from the American court system.

Of the five states with HMO liability clauses, California is unique in allowing HMOs to force all patients to waive the right to trial as a condition of health coverage. That system is dramatically tilted against the consumer. The Bee claims that “health plans with unfair arbitration systems remain vulnerable to court challenges.” In fact, in the HMOs’ “judiciary” — presided over by a pool of private lawyers typically chosen by the HMOs — patients cannot appeal errors of law to a judge. The California Supreme Court has ruled, “Even though an error of law appears on the face of an arbitration award and causes substantial injustice, it is not subject to judicial review.”

Private lawyers who decide HMO arbitrations, and who receive repeat business from HMOs that like their work, can make all the errors of law they choose. To mount a successful appeal, misconduct must rise to the level of fraud.

The curtain of forced arbitration also prevents damning evidence and testimony from becoming part of the public record. Evidence is limited to the private process. Unlike in a court, repeated quality of care violations are shielded from public scrutiny and, of course, the media are not welcome. Delays are common as well, as is abusive behavior by HMO defense lawyers, because there is no judge to ensure fairness.

Such a lack of due process for patients caused a commission of the American Medical Association, American Arbitration Association and American Bar Association to unanimously conclude in 1998 that patients should enter into arbitration voluntarily, after a dispute occurs, not as a condition of receiving health coverage at an HMO. AB 1751 would guarantee that standard, but is the target of an intensive lobbying and misinformation campaign by the HMO industry.

The HMO lobby claims patients can always join an HMO that does not use binding arbitration. However, of the 19 California health plans responding to a recent industry survey on the issue, 15 use binding arbitration, and three of the other four are publicly run. That makes the only choice for the typical patient in the commercial HMO between health care and due process.

Patients expect that the “right to sue” their HMO, enacted in 1999 by the Legislature and to take effect in 2001,means the right to go to court, not to a quasijudicial proceeding that is often unfair, prolonged and more expensive for the patient (arbitrators can charge $400 per hour vs. $350 for court costs).

The defenders of HMOs’ private judiciary claim health costs will escalate if AB 1751 becomes law and patients can sue in court. In fact, it’s more likely that patients would still use arbitration, but HMOs would have to make the system fairer, and public, to attract them.

Texas patients have had the right to take their HMOs to court since 1997, and state rules preclude them from being forced into binding arbitration. Yet there have been only six cases under the law, and health care costs there are below the national average. On Friday, Arizona became the fifth state with an HMO liability law and its constitution specifically guarantees the right to trial.

Escalating costs result when the public isn’t permitted to scrutinize the facts behind complaints brought by fellow health-care consumers. This arbitration system perpetuates shoddy treatment by HMOs by not allowing the specifics of cases brought against HMOs to be revealed. California patients should not have to shoulder rising health costs, or be told to choose between health care and the Seventh Amendment right to a trial.

Jamie Court is director of Consumers for Quality Care and co-author of “Making a Killing: HMOs and the Threat To Your Health.” He can be reached be e-mail at [email protected] Web site: http://www.consumerwatchdog.org