Patient Advocates Seek State Support for HMO Lawsuits

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Los Angeles Business Journal

Consumer advocates are calling on the state Department of Managed Health Care to co-sponsor a bill that would give patients the right to sue their HMOs in court rather than be forced to go to binding arbitration.

The Foundation for Taxpayer & Consumer Rights made the call last week after department Director Daniel Zingale turned down a foundation request to open all arbitration records to public inspection, citing state privacy laws.

The foundation maintains that keeping arbitration records private hides patterns of HMO abuse. It also gives individual insurers the upper hand in arbitration proceedings because they have access to records of past arbitration proceedings they were involved in, the foundation asserts.

A recent state study found that 80 percent of the nearly 24 million California residents enrolled in HMOs are in plans that require arbitration of disputes.

“All we are trying to do is create parity between the arbitration and the court proceeding,” said Jamie Court, the foundation’s executive director.

A bill sponsored by the foundation and carried by Sen. Sheila Kuehl, D-Santa Monica, when she was in the Assembly last year would have given patients such a choice but never made it out of the chamber.

Court said the department’s co-sponsorship would assist passage of new legislation. But a department spokesman said it is unlikely the agency would undertake such an action. Instead, the department is currently focusing on improving the arbitration process.

“We don’t join lobbying coalitions, but we are interested in working on that issue,” said Steven Fisher, the department’s deputy director for communications and planning.

The foundation maintains that the arbitration system favors HMOs, because the insurers have leverage over arbitrators. However, HMOs assert that arbitration helps keep health care affordable by facilitating quick and less-expensive resolution of disputes.

Bobby Pena, a spokesman for the California Association of Health Plans, said the HMO trade group acknowledges that arbitration can be improved, and it is in discussions with the department about giving state regulators greater access to arbitration records.

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