Modern Physician

California’s managed care chief plans to evaluate health plan arbitration but has no plans to comply with a consumer group’s petition to make arbitration records public.

Daniel Zingale, director of the California Department of Managed Health Care, says he’s trying to square consumers’ right to know with patients’ rights to privacy. He’s concerned about flaws in the arbitration system. He says he would like to know how many cases are settled before the actual arbitration hearing.

”We agree with the importance of collecting information about arbitration. We’re very interested in knowing how arbitration decisions are used to improve quality of healthcare,” Zingale says.

Relying on the results of a questionable study, a California consumer group wants the state to make public complete health plan arbitration records.

The Foundation for Taxpayer and Consumer Rights filed a petition with the department calling for ”full public reporting and disclosure of all documents and discovery obtained in forced HMO arbitration.” The foundation views arbitration as ”forced” because most health plan contracts require enrollees to use arbitration rather than litigation to settle disputes such as denial of care.

”The recent failure of health plans to report even basic information about their arbitrations with patients suggests the need for rules guaranteeing open disclosure,” the petition reads.

Zingale says that while he understands the need to keep health plans accountable, complying with the request would violate state law.

California law dictates that the department ”shall not release information identifying a person, entity, enrollee or health plans,” Zingale says. ”It’s in the law right now. The state law is pretty clear.” He adds that provider information is also confidential.

Any change in that law would have to come through the California Legislature and the governor, Zingale says.

But a federal law trumps any changes the state may make to the law.

The Health Insurance Portability and Accountability Act of 1996 forbids the disclosure of any information that identifies or could potentially identify patients. The privacy guidelines were issued in their final form in December but have been reopened to further comment by the Bush administration. But regardless of any changes the administration makes, the fundamental aspect of prohibiting release of patient information won’t change. HHS Secretary Tommy Thompson says he wants to ensure that patients’ rights are protected, but he’s concerned the final regulations are too stringent.

In a statement, FTCR executive director Jamie Court says he believes a recent study shows health plans aren’t correctly reporting the number of arbitration cases they have each year.

The study, which was commissioned by then-Assemblyman Sheila Kuehl, found 171 cases of arbitration in a year when researchers believed they should have found 300.

Kuehl commissioned the study done by the California Research Bureau during the 2000 legislative session to support her failed attempt to introduce a bill that would have allowed patients to sue their health plans. The study was released in January.

But in an interview with Modern Physician, the study’s main author admitted that the data was flawed, that he could only find data from one of two state agencies and that getting accurate data was ”an insurmountable problem” (see Feb. 12, page 3).

In fact, data from the California Association of Health Plans shows that five of the state’s largest plans had a total of 10 arbitration cases in 1999 and 2000. Those five plans cover about half of the state’s 21 million managed care enrollees.

Court’s group wants access to all information related to any patient arbitration requests, including those settled before the actual hearing.

Representatives from the foundation didn’t return phone calls seeking comment.

Health plan officials are more than willing to provide that information to the DMHC, says Walter Zelman, president and CEO of the California Association of Health Plans.

”I understand Director Zingale’s concerns. I think he will find out, when he investigates the arbitration process, that it is working fairly well and in the consumer’s interest,” Zelman says. ”Health plans have already begun the discussion with him relating to how he might get the information he wants without risking patient confidentiality and privacy.”

The foundation’s petition requests a level of disclosure of patient information that is ”absolutely unprecedented,” Zelman says. ”The kind of things (Court) wants to have publicly available are not generally available in any process to the general public.”

Arbitration settlements, such as out-of-court settlements, are private only when both parties agree to confidentiality restrictions, he says. The fact that the settlement would be private facilitates settling because patients may not want personal information disclosed, Zelman says, and plans don’t want ”someone like Jamie Court (waving) a $100,000 or $1 million settlement around implying the health plans admitted guilt and did something wrong,” he adds.

There is always a balance between compelling public interest and privacy, Zelman says. ”The burden of proof should fall on the individual or organization that says privacy or confidentiality should be breached. Until Jamie Court or someone else can produce hard physical evidence that there is some flaw in the process, I don’t see any reason why we should risk breaching the rights of confidentiality and patients.

”I see no compelling reason other than the interest of the trial attorneys to take the unprecedented step such as he’s taking.”