The Blue Ribbon Panel
The genesis of this Advisory Panel was the decision of the California
Supreme Court in Engalla vs. Permanente.2 In harsh terms, the court criticized the
Kaiser Permanente3 arbitration plan for failing to guarantee the rapid appointment of
a neutral arbitrator. The Court also observed that the average time taken to
conclude most arbitrations was too long and inconsistent with Kaiser Permanente's
promise to its members of a speedy process...
During this process, we were also drawn into a brief examination of the ways
in which medical malpractice might be avoided and how dispute resolution
procedures affect quality assurance in the medical setting. While not part of our
mandate, we were impressed with some of the work in this field.10 The approach is
based on the notion that the traditional fault-finding method of our court system and
traditional arbitration might not be the best way to prevent the occurrence of
medical malpractice.
Those interested in this field suggest that an alternative is to
develop an environment where blame is avoided, the duty to report mistakes is
taken for granted and ways are found to change the medical system to avoid
the mistakes in the future.
It would be of immense value if Kaiser Permanente would expand its efforts in
this area...
Kaiser Permanente is California's single biggest HMO user of binding
arbitration to resolve malpractice claims.11 This practice started in 1971 and its use
today is the universal form of required dispute resolution for Kaiser Permanente.
Even more singular, the Health Plan contracts to defend and indemnify the
physicians and Permanente Medical Groups for medical malpractice. Given the
current national and California efforts to impose health plan liability, it is worth
noting that Kaiser Permanente already assumes that contractual obligation...
Arbitration Statistics - California Division
Professional Liability Clams by Calendar Year
Chart 1:
Number of Demands
for Arbitration and
Summons & Complaints
1992 1993 1994 1995 1996 1997*
855 822 819 886 958 973
No. of Settlements
306 302 315 249 304 264
No. of Abandonment/ Dismissals
227 476 502 512 490 635
No of Arbitrations
88 126 134 117 151 105
...This rotation would diminish the reliance of any one set of neutral arbitrators for
Kaiser Permanente cases and should decrease the risk and perception of possible
"repeat player" bias towards Kaiser Permanente by neutral arbitrators...Disclosures by
potential arbitrators
20) The Independent Administrator should maintain a list of all
qualified neutral arbitrators and arbitration organizations and maintain a file
on each. An individual neutral arbitrator's file should contain the history of
the arbitrator's rulings in Kaiser arbitrations, written decisions (if any) in
those cases, a biography and any additional information necessary to enable
parties to screen for bias and possible conflicts of interest.
21) These files should be made available to parties and counsel in
pending Kaiser Permanente arbitrations. When a list of potential neutral
arbitrators is sent to parties and counsel, a summary of the file information on
the proposed neutral arbitrators should be included in that mailing.
Rationale: A major criticism of the Kaiser Permanente arbitration system has been
that Kaiser Permanente, as the repeat party, has greater knowledge of the past
performance of potential neutral arbitrators.
Protection of privacy
24) In developing principles to govern the Independent
Administrator and the neutral arbitrators who will serve in Kaiser
Permanente cases, Kaiser Permanente and the Advisory Committee should
give substantial care to ensure the privacy of members, physicians and Kaiser
personnel. Prior to making past awards and written decisions available, as
recommended above, the Independent Administrator should remove the names
of parties, members, physicians and Kaiser Permanente personnel, as well as
the name and location of the Kaiser facility.
Rationale: A major benefit of arbitration is the privacy it provides to Kaiser
members and Kaiser Permanente personnel. The goal of providing substantially
more information on past cases to counsel and parties selecting arbitrators in
pending cases could undermine the goal of maintaining party privacy. Therefore,
the Panel recommends that any information that could be used to identify an
individual party be removed from documents placed in the Independent
Administrator's files for review.
...In addition, some plaintiffs'
counsel believe that Kaiser Permanente is sometimes reluctant to have early
settlement discussions. The Panel does not know if this criticism is valid, but
believes that increasing opportunities for settlement talks will benefit all parties...
The genesis of this Advisory Panel was the decision of the California
Supreme Court in Engalla vs. Permanente.2 In harsh terms, the court criticized the
Kaiser Permanente3 arbitration plan for failing to guarantee the rapid appointment of
a neutral arbitrator. The Court also observed that the average time taken to
conclude most arbitrations was too long and inconsistent with Kaiser Permanente's
promise to its members of a speedy process...
During this process, we were also drawn into a brief examination of the ways
in which medical malpractice might be avoided and how dispute resolution
procedures affect quality assurance in the medical setting. While not part of our
mandate, we were impressed with some of the work in this field.10 The approach is
based on the notion that the traditional fault-finding method of our court system and
traditional arbitration might not be the best way to prevent the occurrence of
medical malpractice.
Those interested in this field suggest that an alternative is to
develop an environment where blame is avoided, the duty to report mistakes is
taken for granted and ways are found to change the medical system to avoid
the mistakes in the future.
It would be of immense value if Kaiser Permanente would expand its efforts in
this area...
Kaiser Permanente is California's single biggest HMO user of binding
arbitration to resolve malpractice claims.11 This practice started in 1971 and its use
today is the universal form of required dispute resolution for Kaiser Permanente.
Even more singular, the Health Plan contracts to defend and indemnify the
physicians and Permanente Medical Groups for medical malpractice. Given the
current national and California efforts to impose health plan liability, it is worth
noting that Kaiser Permanente already assumes that contractual obligation...
Arbitration Statistics - California Division
Professional Liability Clams by Calendar Year
Chart 1:
Number of Demands
for Arbitration and
Summons & Complaints
1992 1993 1994 1995 1996 1997*
855 822 819 886 958 973
No. of Settlements
306 302 315 249 304 264
No. of Abandonment/ Dismissals
227 476 502 512 490 635
No of Arbitrations
88 126 134 117 151 105
...This rotation would diminish the reliance of any one set of neutral arbitrators for
Kaiser Permanente cases and should decrease the risk and perception of possible
"repeat player" bias towards Kaiser Permanente by neutral arbitrators...Disclosures by
potential arbitrators
20) The Independent Administrator should maintain a list of all
qualified neutral arbitrators and arbitration organizations and maintain a file
on each. An individual neutral arbitrator's file should contain the history of
the arbitrator's rulings in Kaiser arbitrations, written decisions (if any) in
those cases, a biography and any additional information necessary to enable
parties to screen for bias and possible conflicts of interest.
21) These files should be made available to parties and counsel in
pending Kaiser Permanente arbitrations. When a list of potential neutral
arbitrators is sent to parties and counsel, a summary of the file information on
the proposed neutral arbitrators should be included in that mailing.
Rationale: A major criticism of the Kaiser Permanente arbitration system has been
that Kaiser Permanente, as the repeat party, has greater knowledge of the past
performance of potential neutral arbitrators.
Protection of privacy
24) In developing principles to govern the Independent
Administrator and the neutral arbitrators who will serve in Kaiser
Permanente cases, Kaiser Permanente and the Advisory Committee should
give substantial care to ensure the privacy of members, physicians and Kaiser
personnel. Prior to making past awards and written decisions available, as
recommended above, the Independent Administrator should remove the names
of parties, members, physicians and Kaiser Permanente personnel, as well as
the name and location of the Kaiser facility.
Rationale: A major benefit of arbitration is the privacy it provides to Kaiser
members and Kaiser Permanente personnel. The goal of providing substantially
more information on past cases to counsel and parties selecting arbitrators in
pending cases could undermine the goal of maintaining party privacy. Therefore,
the Panel recommends that any information that could be used to identify an
individual party be removed from documents placed in the Independent
Administrator's files for review.
...In addition, some plaintiffs'
counsel believe that Kaiser Permanente is sometimes reluctant to have early
settlement discussions. The Panel does not know if this criticism is valid, but
believes that increasing opportunities for settlement talks will benefit all parties...
The health care institution commonly known as "Kaiser" is actually a combination of
organizations. First, the Kaiser Foundation Health Plan, Inc. is a California nonprofit health
benefit corporation, and a federally qualified HMO. The Health Plan arranges for medical
benefit by contracting exclusively with The Permanente Medical Group, Inc. (Northern
California) and the Southern California Permanente Medical Group. Hospital services are
provided by contract with Kaiser Foundation Hospitals, another California nonprofit public
benefit corporation.
The Health Plan, Kaiser Foundation Hospitals and the Medical Groups work
collaboratively as the Kaiser Permanente Medical Care Program or 'Kaiser Permanente."
organizations. First, the Kaiser Foundation Health Plan, Inc. is a California nonprofit health
benefit corporation, and a federally qualified HMO. The Health Plan arranges for medical
benefit by contracting exclusively with The Permanente Medical Group, Inc. (Northern
California) and the Southern California Permanente Medical Group. Hospital services are
provided by contract with Kaiser Foundation Hospitals, another California nonprofit public
benefit corporation.
The Health Plan, Kaiser Foundation Hospitals and the Medical Groups work
collaboratively as the Kaiser Permanente Medical Care Program or 'Kaiser Permanente."
KAISERPAPERS.OR
Mandatory arbitration is a private proceeding in which there is no public record or
judicial appeal, and arbitrators are often biased in favor of the HMO. Kaiser failed to
follow state law requiring the HMO to disclose to enrollees that they were giving up their
right to go to court in case of a dispute. Because of this failure, a court found that the
HMO's arbitration provision was not enforceable. Yedalian's suit forced Kaiser to disclose
to patients considering a medical malpractice claim that they may not be bound to
arbitration. After the document filed today is signed by the court, the action will be
dismissed and the court will retain jurisdiction over the case to ensure that the settlement
is enforced and Kaiser informs patients of their rights.
http://legalstuff.kaiserpapers.org/arbitrationnot.html
It is important that you get a copy of your medical records immediately if you are
considering arbitration with Kaiser. Get them before Medical Legal re-writes
them!.
http://www.harp.org/recordmethod.htm
"They don't want to diagnose or treat Lyme disease, because it is very costly to diagnose
and treat. Kaiser has a system where you can't sue them if you are misdiagnosed,
so it just doesn't care."
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/archive/2003/11/17/urbananimal.DTL
In that section you will find two documents that should make a prudent person very
wary of trusting that their medical records are correct and that their Permanente
Physician would only have the best interest of the patient at heart.
http://selfincrimination.kaiserpapers.org
Mandatory arbitration is a private proceeding in which there is no public record or
judicial appeal, and arbitrators are often biased in favor of the HMO. Kaiser failed to
follow state law requiring the HMO to disclose to enrollees that they were giving up their
right to go to court in case of a dispute. Because of this failure, a court found that the
HMO's arbitration provision was not enforceable. Yedalian's suit forced Kaiser to disclose
to patients considering a medical malpractice claim that they may not be bound to
arbitration. After the document filed today is signed by the court, the action will be
dismissed and the court will retain jurisdiction over the case to ensure that the settlement
is enforced and Kaiser informs patients of their rights.
http://legalstuff.kaiserpapers.org/arbitrationnot.html
It is important that you get a copy of your medical records immediately if you are
considering arbitration with Kaiser. Get them before Medical Legal re-writes
them!.
http://www.harp.org/recordmethod.htm
"They don't want to diagnose or treat Lyme disease, because it is very costly to diagnose
and treat. Kaiser has a system where you can't sue them if you are misdiagnosed,
so it just doesn't care."
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/archive/2003/11/17/urbananimal.DTL
In that section you will find two documents that should make a prudent person very
wary of trusting that their medical records are correct and that their Permanente
Physician would only have the best interest of the patient at heart.
http://selfincrimination.kaiserpapers.org
Kaiser arbitration
How to Survive A
Kaiser Mandatory
Binding Arbitration
In a brief study of cost
differences between states with
binding mandatory arbitration in
Kaiser contracts and those that
do not have a mandatory
arbitration clause in their Kaiser
contracts, we have found that
there is no substantial difference
in cost of premiums. Binding
mandatory arbitration does not
appear to have any bearing at
all on the patients premium cost.
I had originally had this very
positive idea that this page
would just be quick pointers and
facts about the Kaiser arbitration
system that would be of
assistance for individuals going
through this type of a legal
situation. Unfortunately, there is
very little to say about Kaiser
arbitration that is positive. Like
everything else Kaiser related, it
is set up only to help Kaiser and
not the patient. Oh, I know what
the rules say and I know what
the government says but again
you have to consider that theory
doesn't always work when it
comes to the health care
industry.
The following is the truth as has
been repeatedly reported to me
for many years.
1. If you can mediate with
Kaiser then do so. You will
probably be strongly
encouraged to sign a gag order
and it will not be documented as
having occurred in any legal
realm available to the public but
you stand a better chance
overall. You will survive with at
least most of your self respect
intact. There will be no record
that your mediation ever took
place.
2. If you are forced to arbitrate
keep in mind that since these
arbitration records are in
government databases for
tracking purposes, Kaiser wants
to make sure the material looks
good only for them so your odds
of coming out ahead are slim to
none. Good data in government
databases gets Kaiser
government grants and
donations and CONTRACTS.
These are Kaiser's meal tickets
and they don't want them taken
away.
3. Arbitration is going to cost
you a lot of money no matter if
the attorney is covering initial
expenses or not. In the end the
attorney has to be reimbursed
so costs for medical experts, etc.
will come out of any settlement
and will probably be the greater
percentage of the settlement.
Kaiser has set aside more
money than you or your attorney
just for the purpose of making
this as difficult as possible.
Kaiser reported in 2005 that
they set aside $40,000,000.00
just for these little (to them)
pesky legal matters.
4. Expect to have a Kaiser
Private Investigator tailing you
and talking to your friends,
neighbors, ministers,
co-workers, people at the
market, at your children's
schools, at your place of
employment at the movies, etc.
They might claim that they are
gathering data but they are
really just trying to intimidate you.
5. Expect to find out through
your neighbors, children's
schools, your church,
co-workers, etc., that everyone
now knows about your personal
medical history because
someone has gone around and
told these people about you.
Again, this is just a classic form
of Kaiser legal intimidation.
6. Every single traffic ticket you
have ever had, every single
indiscretion that you have ever
made from the age of 5 on up
will now be publicly used against
you, if your attorney allows it.
Only true friends will help you
track this release of information
back to the source. Most people
will not want to become involved
in helping you because they will
not want it done to them as well.
Expect lots of crank calls. Don't
be shocked if you even receive
threats. Again, they are just
trying to intimidate you and get
to you drop your legal action.
7. Expect to be ordered to
present at the very last minute
the previous ten years of all IRS
filings. Kaiser will attempt to
discredit you by implying that
you have lied on your taxes.
Because it appears that they do
this with their records they
automatically assume that
everyone else does. It isn't true
that most people lie and most
people can clearly show that but
again Kaiser may do this to you.
It is just another form of
intimidation. It also takes time
for Kaiser to do this during the
arbitration and when you are
paying for it, time is money.
These actions or accusations
are often followed by a
preplanned dropping of a large
book to make a loud sound or
some other stunt to distract
everyone. In doing so the last
thing in everyone's memory is
the accusation or implication
made by Kaiser staff. It is a little
mind game that the attorneys
sometimes play.
8. Expect Kaiser to create
negative information about you.
Expect Kaiser to conduct an
arbitration as if it were a nasty
divorce preceding.
9. Expect during the arbitration
to have what is left of your belief
system that you have developed
over the years about right and
wrong to be further destroyed.
You probably will see and hear
things that will make you wonder
why the government is allowing
this type of a system. You
probably will see and hear
things that will momentarily make
you think that you are really
living in a corrupt third world
country.
10. After the arbitration, if you
are unable to now obtain
medical insurance elsewhere,
expect to have Kaiser staff
forget to give your family their
immunization shots, to follow up
on medical treatments, to even
be able to readily find medical
appointments for you. They will
make it appear that they are
suddenly very busy and that
they are also just having a lot of
clerical errors. Their actions
would be called retaliation by the
majority of the world.
11. If you have won an
arbitration and have been
granted a financial settlement
expect to wait a long time to
receive the check. In fact expect
and be prepared to have to hire
an attorney to collect the check
for you. Just because Kaiser
was told to do something doesn't
mean that they will be in any
hurry to do so on their own.
12. Be prepared to find that
your "trusted" family doctor turns
on you during an arbitration and
has suddenly documented all
sorts of things about you and
your family that you never knew
happened. This is a great form
of creative writing on Kaiser's
part and they really should start
winning some fiction awards for
it but this is harmful to your case.
13. Kaiser attorneys are also
great actors and probably
should be nominated for some
awards. Most people would
realize that these are scripted
parts that have been well
rehearsed but that the script
also has unbelievable flaws.
Depending on who the arbitrator
is and where their next meal
ticket is coming from it is often
likely that the arbitrator will
applaud these performances.
14. Don't be shocked if during
the arbitration that the Kaiser
attorney and the arbitrator
during proceedings make lunch
arrangements together or talk
about their children's play dates.
15. If at all possible have a
court reporter document
everything during the arbitration.
Then you will be at least able to
prove what you experienced at a
later time. It may not change the
result of the arbitration but at
least you will be able to prove
what you witnessed.
16. Do not expect to receive
anything from Kaiser as a result
of these proceedings. You have
waived many of your
Constitutional rights by going to
arbitration and there is no
record in most cases of what
has taken place. You are going
to spend a great deal of money
to arbitrate and it is very likely
that you will never get it all back.
See it for what it is.
Kaiser Mandatory
Binding Arbitration
In a brief study of cost
differences between states with
binding mandatory arbitration in
Kaiser contracts and those that
do not have a mandatory
arbitration clause in their Kaiser
contracts, we have found that
there is no substantial difference
in cost of premiums. Binding
mandatory arbitration does not
appear to have any bearing at
all on the patients premium cost.
I had originally had this very
positive idea that this page
would just be quick pointers and
facts about the Kaiser arbitration
system that would be of
assistance for individuals going
through this type of a legal
situation. Unfortunately, there is
very little to say about Kaiser
arbitration that is positive. Like
everything else Kaiser related, it
is set up only to help Kaiser and
not the patient. Oh, I know what
the rules say and I know what
the government says but again
you have to consider that theory
doesn't always work when it
comes to the health care
industry.
The following is the truth as has
been repeatedly reported to me
for many years.
1. If you can mediate with
Kaiser then do so. You will
probably be strongly
encouraged to sign a gag order
and it will not be documented as
having occurred in any legal
realm available to the public but
you stand a better chance
overall. You will survive with at
least most of your self respect
intact. There will be no record
that your mediation ever took
place.
2. If you are forced to arbitrate
keep in mind that since these
arbitration records are in
government databases for
tracking purposes, Kaiser wants
to make sure the material looks
good only for them so your odds
of coming out ahead are slim to
none. Good data in government
databases gets Kaiser
government grants and
donations and CONTRACTS.
These are Kaiser's meal tickets
and they don't want them taken
away.
3. Arbitration is going to cost
you a lot of money no matter if
the attorney is covering initial
expenses or not. In the end the
attorney has to be reimbursed
so costs for medical experts, etc.
will come out of any settlement
and will probably be the greater
percentage of the settlement.
Kaiser has set aside more
money than you or your attorney
just for the purpose of making
this as difficult as possible.
Kaiser reported in 2005 that
they set aside $40,000,000.00
just for these little (to them)
pesky legal matters.
4. Expect to have a Kaiser
Private Investigator tailing you
and talking to your friends,
neighbors, ministers,
co-workers, people at the
market, at your children's
schools, at your place of
employment at the movies, etc.
They might claim that they are
gathering data but they are
really just trying to intimidate you.
5. Expect to find out through
your neighbors, children's
schools, your church,
co-workers, etc., that everyone
now knows about your personal
medical history because
someone has gone around and
told these people about you.
Again, this is just a classic form
of Kaiser legal intimidation.
6. Every single traffic ticket you
have ever had, every single
indiscretion that you have ever
made from the age of 5 on up
will now be publicly used against
you, if your attorney allows it.
Only true friends will help you
track this release of information
back to the source. Most people
will not want to become involved
in helping you because they will
not want it done to them as well.
Expect lots of crank calls. Don't
be shocked if you even receive
threats. Again, they are just
trying to intimidate you and get
to you drop your legal action.
7. Expect to be ordered to
present at the very last minute
the previous ten years of all IRS
filings. Kaiser will attempt to
discredit you by implying that
you have lied on your taxes.
Because it appears that they do
this with their records they
automatically assume that
everyone else does. It isn't true
that most people lie and most
people can clearly show that but
again Kaiser may do this to you.
It is just another form of
intimidation. It also takes time
for Kaiser to do this during the
arbitration and when you are
paying for it, time is money.
These actions or accusations
are often followed by a
preplanned dropping of a large
book to make a loud sound or
some other stunt to distract
everyone. In doing so the last
thing in everyone's memory is
the accusation or implication
made by Kaiser staff. It is a little
mind game that the attorneys
sometimes play.
8. Expect Kaiser to create
negative information about you.
Expect Kaiser to conduct an
arbitration as if it were a nasty
divorce preceding.
9. Expect during the arbitration
to have what is left of your belief
system that you have developed
over the years about right and
wrong to be further destroyed.
You probably will see and hear
things that will make you wonder
why the government is allowing
this type of a system. You
probably will see and hear
things that will momentarily make
you think that you are really
living in a corrupt third world
country.
10. After the arbitration, if you
are unable to now obtain
medical insurance elsewhere,
expect to have Kaiser staff
forget to give your family their
immunization shots, to follow up
on medical treatments, to even
be able to readily find medical
appointments for you. They will
make it appear that they are
suddenly very busy and that
they are also just having a lot of
clerical errors. Their actions
would be called retaliation by the
majority of the world.
11. If you have won an
arbitration and have been
granted a financial settlement
expect to wait a long time to
receive the check. In fact expect
and be prepared to have to hire
an attorney to collect the check
for you. Just because Kaiser
was told to do something doesn't
mean that they will be in any
hurry to do so on their own.
12. Be prepared to find that
your "trusted" family doctor turns
on you during an arbitration and
has suddenly documented all
sorts of things about you and
your family that you never knew
happened. This is a great form
of creative writing on Kaiser's
part and they really should start
winning some fiction awards for
it but this is harmful to your case.
13. Kaiser attorneys are also
great actors and probably
should be nominated for some
awards. Most people would
realize that these are scripted
parts that have been well
rehearsed but that the script
also has unbelievable flaws.
Depending on who the arbitrator
is and where their next meal
ticket is coming from it is often
likely that the arbitrator will
applaud these performances.
14. Don't be shocked if during
the arbitration that the Kaiser
attorney and the arbitrator
during proceedings make lunch
arrangements together or talk
about their children's play dates.
15. If at all possible have a
court reporter document
everything during the arbitration.
Then you will be at least able to
prove what you experienced at a
later time. It may not change the
result of the arbitration but at
least you will be able to prove
what you witnessed.
16. Do not expect to receive
anything from Kaiser as a result
of these proceedings. You have
waived many of your
Constitutional rights by going to
arbitration and there is no
record in most cases of what
has taken place. You are going
to spend a great deal of money
to arbitrate and it is very likely
that you will never get it all back.
See it for what it is.
$45,075,425.00
of Kaiser Foundation
Health Plan's income
in 2007 went to legal
fees:
Link: Kaiser 2007 tax returns
of Kaiser Foundation
Health Plan's income
in 2007 went to legal
fees:
Link: Kaiser 2007 tax returns
Kaiser Permanente
Mandatory Arbitration
Wikipedia
The Foundation for Taxpayer
and Consumer Rights contends
that Kaiser continues to oppose
HMO arbitration reform
The current Kaiser arbitration
system has been criticized
because of the 'frequent user'
problem. Since Kaiser may
accept or reject any neutral
arbitrator, decisions made
against Kaiser may
effectively put a judge or
lawyer wanting to earn a
living as an arbitrator out of
business. The personal
economic advantage that
accrues to an arbitrator
finding in favor of Kaiser,
and the potential inability of
an arbitrator to work if he or
she finds against Kaiser has
resulted in the accusation
that this system is inherently
biased in favor of Kaiser and
against patients who make
claims of malpractice.
Kaiser established an Office of
Independent Administrators
(OIA) in 1999 to oversee the
arbitration process. The
degree to which this is
independent has been
questioned.
Patients and consumer interest
groups sporadically attempt to
bring lawsuits against Kaiser
Permanente. Recent lawsuits
include Gary Rushford's 1999
attempt to use proof of a
physician lie to overturn an
arbitration decision.
Mandatory Arbitration
Wikipedia
The Foundation for Taxpayer
and Consumer Rights contends
that Kaiser continues to oppose
HMO arbitration reform
The current Kaiser arbitration
system has been criticized
because of the 'frequent user'
problem. Since Kaiser may
accept or reject any neutral
arbitrator, decisions made
against Kaiser may
effectively put a judge or
lawyer wanting to earn a
living as an arbitrator out of
business. The personal
economic advantage that
accrues to an arbitrator
finding in favor of Kaiser,
and the potential inability of
an arbitrator to work if he or
she finds against Kaiser has
resulted in the accusation
that this system is inherently
biased in favor of Kaiser and
against patients who make
claims of malpractice.
Kaiser established an Office of
Independent Administrators
(OIA) in 1999 to oversee the
arbitration process. The
degree to which this is
independent has been
questioned.
Patients and consumer interest
groups sporadically attempt to
bring lawsuits against Kaiser
Permanente. Recent lawsuits
include Gary Rushford's 1999
attempt to use proof of a
physician lie to overturn an
arbitration decision.
Engalla v. Permanente Medical Group, Inc.
University of California, Hastings College of Law
Hastings Law Journal
March, 1999
By Russell Evans
On June 30, 1997, the California Supreme Court handed down its decision in Engalla v.
Permanente Medical Group, Inc. The Engalla Court refused to compel arbitration of
a medical malpractice claim despite the presence of a binding arbitration clause
in the terms of a medical insurance agreement.
The California Court indicated that defendant malfeasance appeared likely, and it
remanded the case to the trial court for factual determinations on whether the
defendant HMO, Kaiser Permanente Medical Group, induced the
arbitration clause through fraud or waived its right to arbitration
due to its dilatory conduct.
...Rather, it is the Court's intriguing examination and careful scrutiny of Kaiser's arbitration
process that raises key legal questions. Under the conventional review of arbitration
clauses, courts limit their analysis to issues of creation and initial consent to such clauses.
The Engalla Court, however, did not limit itself to the formation of the arbitration
agreement. Instead, the Court conducted a sweeping examination into how the
Kaiser arbitration process functioned and considered whether the process was
an adequate system for resolving malpractice claims. Using this mode of
analysis, the majority found numerous flaws in Kaiser's arbitration process. The
opinion is especially critical of the ways in which the arbitration process infringed upon the
procedural rights of claimants. The Court's examination of the arbitral process, rather
than agreement formation, and its focus ...
University of California, Hastings College of Law
Hastings Law Journal
March, 1999
By Russell Evans
On June 30, 1997, the California Supreme Court handed down its decision in Engalla v.
Permanente Medical Group, Inc. The Engalla Court refused to compel arbitration of
a medical malpractice claim despite the presence of a binding arbitration clause
in the terms of a medical insurance agreement.
The California Court indicated that defendant malfeasance appeared likely, and it
remanded the case to the trial court for factual determinations on whether the
defendant HMO, Kaiser Permanente Medical Group, induced the
arbitration clause through fraud or waived its right to arbitration
due to its dilatory conduct.
...Rather, it is the Court's intriguing examination and careful scrutiny of Kaiser's arbitration
process that raises key legal questions. Under the conventional review of arbitration
clauses, courts limit their analysis to issues of creation and initial consent to such clauses.
The Engalla Court, however, did not limit itself to the formation of the arbitration
agreement. Instead, the Court conducted a sweeping examination into how the
Kaiser arbitration process functioned and considered whether the process was
an adequate system for resolving malpractice claims. Using this mode of
analysis, the majority found numerous flaws in Kaiser's arbitration process. The
opinion is especially critical of the ways in which the arbitration process infringed upon the
procedural rights of claimants. The Court's examination of the arbitral process, rather
than agreement formation, and its focus ...
ANNUAL REPORT of the OFFICE OF THE INDEPENDENT ADMINISTRATOR
of the KAISER FOUNDATION HEALTH PLAN, INC.
MANDATORY ARBITRATION SYSTEM for
DISPUTES WITH HEALTH PLAN MEMBERS
January 1, 2010 - December 31, 2010
...A. How Cases Closed
1. Settlements – 44% of Closures
During 2010, 277 of the 624 cases settled... In 18 settled cases (6.5%), the
claimant was in pro per...
2. Withdrawn Cases – 25% of Closures
In 2010, the OIA received notice that 155 claimants had withdrawn their claims. In
48 (31%) of these cases, the claimant was in pro per...
3. Abandoned Cases – 4% of Closures...
4. Dismissed Cases – 3% of Closures...
5. Summary Judgment – 11% of Closures
In 2010, 67 cases were decided by summary judgments granted to the respondent. In 46
of these cases (69%), the claimant was in pro per. Failing to have an expert witness (29
cases), failing to file an opposition (12 cases), exceeding the statute of limitations (14
cases), and no triable issue
of fact (11 cases) were the most common reasons given by the neutrals in their written
decisions for the grant of summary judgment...
6. Cases Decided After Hearing – 12% of Closures
a. Who Won
Twelve percent of all cases closed in 2010 (76 of 624) proceeded through a full
arbitration hearing to an award. Judgment was for Kaiser in 51 of these cases, or 67%. In
six of these cases, the claimant was in pro per. The claimant prevailed in 25 of them, or
33%. None was a pro per claimant.
b. How Much Claimants Won
Twenty-five cases resulted in awards to claimants. One claimant was awarded
$2,110,000. The range of relief is $20,000 – $2,110,000. The average amount of an
award is $392,461...
of the KAISER FOUNDATION HEALTH PLAN, INC.
MANDATORY ARBITRATION SYSTEM for
DISPUTES WITH HEALTH PLAN MEMBERS
January 1, 2010 - December 31, 2010
...A. How Cases Closed
1. Settlements – 44% of Closures
During 2010, 277 of the 624 cases settled... In 18 settled cases (6.5%), the
claimant was in pro per...
2. Withdrawn Cases – 25% of Closures
In 2010, the OIA received notice that 155 claimants had withdrawn their claims. In
48 (31%) of these cases, the claimant was in pro per...
3. Abandoned Cases – 4% of Closures...
4. Dismissed Cases – 3% of Closures...
5. Summary Judgment – 11% of Closures
In 2010, 67 cases were decided by summary judgments granted to the respondent. In 46
of these cases (69%), the claimant was in pro per. Failing to have an expert witness (29
cases), failing to file an opposition (12 cases), exceeding the statute of limitations (14
cases), and no triable issue
of fact (11 cases) were the most common reasons given by the neutrals in their written
decisions for the grant of summary judgment...
6. Cases Decided After Hearing – 12% of Closures
a. Who Won
Twelve percent of all cases closed in 2010 (76 of 624) proceeded through a full
arbitration hearing to an award. Judgment was for Kaiser in 51 of these cases, or 67%. In
six of these cases, the claimant was in pro per. The claimant prevailed in 25 of them, or
33%. None was a pro per claimant.
b. How Much Claimants Won
Twenty-five cases resulted in awards to claimants. One claimant was awarded
$2,110,000. The range of relief is $20,000 – $2,110,000. The average amount of an
award is $392,461...
California
Research
Bureau Finds
HMO Arbitration
Is Unfair
1/11/2001
Jamie Court
The California
Research Bureau, the
state equivalent of the
US General
Accounting Office, has
issued a report today
that shows more than
three-fourths of
Californians who are
enrolled in managed
care companies are
forced into binding
arbitration as a
condition of
enrollment and that
the arbitration process
itself is unfair. The
report is on the
Internet at
http://www.library.ca.go
v/html/statseg2a.cfm.
"This report should
convince the
legislature that
patients should not
have to waive their
right to trial simply to
join an HMO," said
Jamie Court, executive
director of the
Foundation for
Taxpayer and
Consumer Rights,
which intends to
reintroduce state
legislation stopping
forced arbitration at
HMOs. "This report
shows the HMO's
private justice system
is tilted against the
patient. With a new
HMO liability law in
effect as of January
1st, it's more critical
than ever that patients
with HMO problems
not be kept out of
court by forced
arbitration
agreements. Other
states with HMO
liability laws, such as
Texas, Washington,
and Georgia, do not
permit HMOs to force
patients into secret
arbitration
proceedings where
private lawyers, rather
than judges, preside."
The report, minor
modifications to which
are detailed in cover
letter from State
Senator Sheila Kuehl,
finds:
* Many health plans
are apparently not
complying with state
reporting
requirements
regarding even minor
details surrounding
the outcomes of their
private arbitrations.
* Contrary to claims by
proponents of
mandatory arbitration,
"Arbitration is
expensive, at least for
patients on normal
budgets. California
arbitrators typically
charge $250 to $400
per hour [and a]
typical California
health care arbitration
costs around $4,500."
* While health plans
are likely to have
repeated experiences
with individual
arbitrators and are in
a good position to
make informed
decisions when
choosing an arbitrator
for a case, "Patients
may not be as well
informed about
arbitrator behavior,
especially if they are
proceeding without
the aid of a lawyer" --
which the report notes
is the case with very
high frequency.
* California, like most
states, does not have
established
professional
standards or licensing
requirements for
arbitrators. Thus
private arbitrators
generally do not have
to meet even minimal
standards of conduct,
nor is there any real
mechanism for a
patient to challenge
an arbitrator's
professional
qualifications.
* Contrary to earlier
claims by some
proponents of
mandatory arbitration
in health care, there
appears to be a very
high rate of repeat
use of preferred
arbitrators by HMOs,
including in the Kaiser
system, which was
supposed to be
reformed following
condemnation of its
practices by the
California Supreme
Court. In a review of
1999 arbitration
claims on file with the
Department of
Managed Health Care,
the report found that
30 percent of Kaiser
Permamente's
arbitration claims (the
largest of the health
plans mandating the
use of binding
arbitration) were
decided by just eight
repeat arbitrators (five
or more arbitrations
each). Strikingly, six of
these eight repeat
arbitrators ruled in
favor of the defense
(Kaiser) in 80% of the
cases. The report
further states that if
one defines a "repeat
arbitrator" more
broadly as someone
who arbitrates more
than three claims in a
given year, almost half
(46 percent) of the
Kaiser cases were
decided by repeat
arbitrators. In those
cases, plaintiffs won
less than a quarter
(24 percent) of the
time.
Research
Bureau Finds
HMO Arbitration
Is Unfair
1/11/2001
Jamie Court
The California
Research Bureau, the
state equivalent of the
US General
Accounting Office, has
issued a report today
that shows more than
three-fourths of
Californians who are
enrolled in managed
care companies are
forced into binding
arbitration as a
condition of
enrollment and that
the arbitration process
itself is unfair. The
report is on the
Internet at
http://www.library.ca.go
v/html/statseg2a.cfm.
"This report should
convince the
legislature that
patients should not
have to waive their
right to trial simply to
join an HMO," said
Jamie Court, executive
director of the
Foundation for
Taxpayer and
Consumer Rights,
which intends to
reintroduce state
legislation stopping
forced arbitration at
HMOs. "This report
shows the HMO's
private justice system
is tilted against the
patient. With a new
HMO liability law in
effect as of January
1st, it's more critical
than ever that patients
with HMO problems
not be kept out of
court by forced
arbitration
agreements. Other
states with HMO
liability laws, such as
Texas, Washington,
and Georgia, do not
permit HMOs to force
patients into secret
arbitration
proceedings where
private lawyers, rather
than judges, preside."
The report, minor
modifications to which
are detailed in cover
letter from State
Senator Sheila Kuehl,
finds:
* Many health plans
are apparently not
complying with state
reporting
requirements
regarding even minor
details surrounding
the outcomes of their
private arbitrations.
* Contrary to claims by
proponents of
mandatory arbitration,
"Arbitration is
expensive, at least for
patients on normal
budgets. California
arbitrators typically
charge $250 to $400
per hour [and a]
typical California
health care arbitration
costs around $4,500."
* While health plans
are likely to have
repeated experiences
with individual
arbitrators and are in
a good position to
make informed
decisions when
choosing an arbitrator
for a case, "Patients
may not be as well
informed about
arbitrator behavior,
especially if they are
proceeding without
the aid of a lawyer" --
which the report notes
is the case with very
high frequency.
* California, like most
states, does not have
established
professional
standards or licensing
requirements for
arbitrators. Thus
private arbitrators
generally do not have
to meet even minimal
standards of conduct,
nor is there any real
mechanism for a
patient to challenge
an arbitrator's
professional
qualifications.
* Contrary to earlier
claims by some
proponents of
mandatory arbitration
in health care, there
appears to be a very
high rate of repeat
use of preferred
arbitrators by HMOs,
including in the Kaiser
system, which was
supposed to be
reformed following
condemnation of its
practices by the
California Supreme
Court. In a review of
1999 arbitration
claims on file with the
Department of
Managed Health Care,
the report found that
30 percent of Kaiser
Permamente's
arbitration claims (the
largest of the health
plans mandating the
use of binding
arbitration) were
decided by just eight
repeat arbitrators (five
or more arbitrations
each). Strikingly, six of
these eight repeat
arbitrators ruled in
favor of the defense
(Kaiser) in 80% of the
cases. The report
further states that if
one defines a "repeat
arbitrator" more
broadly as someone
who arbitrates more
than three claims in a
given year, almost half
(46 percent) of the
Kaiser cases were
decided by repeat
arbitrators. In those
cases, plaintiffs won
less than a quarter
(24 percent) of the
time.
San Diego
Education Report
Education Report
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