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Read Making a Killing

home / healthcare / in the media

San Diego Union Tribune
Feb 15, 2001

by Tony Fong

State asked to make health-plan disputes public

Two consumer groups have petitioned the state to open up the arbitration system used by most health plans to resolve disputes with plan members.

The petition asks the state to make public all documents and discoveries obtained during arbitration, a process used by many companies and government agencies to resolve disputes outside of court.

Such records currently are not open to the public.

The Foundation for Taxpayer & Consumer Rights and the Health Administration Responsibility Project -- both based in Santa Monica -- filed the request this week.

Citing a report issued last month by the California Research Bureau, the research arm of the state Legislature, the petition says: "The recent failure of health plans to report even basic information about their arbitrations with patients suggests the need for rules guaranteeing open disclosure."

Daniel Zingale, the director of the state Department of Managed Health Care, must respond to the petition within 30 days of the filing.

A representative for health plans called any efforts to make all arbitration records public a "grave mistake."

"We don't mind giving you (the Department of Managed Health Care) more information about arbitration so you can decide whether the system is working well," said Walter Zelman of the California Association of Health Plans. "But making this an open process risks privacy, confidentiality and opens up liability issues."

Zingale, who is evaluating the petition, said he would not be willing to disclose private medical information about patients without their approval.

He also said the department already is gathering information from health plans about their arbitration practices -- particularly about the actions health plans take when a decision is made against them.

"We need to find out what they do to improve things in the future for patients," Zingale said.

In January, the California Research Bureau reported that arbitration is costly to patients and unfairly tilted in favor of health plans. More than 18 million Californians -- or 80 percent of the state's managed care enrollees -- belong to health plans with binding arbitration clauses in their contracts..

Last month's report said health plans may be violating legal requirements to report arbitration cases to the state. Each year, about 300 arbitration cases are decided, but in 1999 just 171 were reported to the state, the report said.

Zelman dismissed those findings, saying the 300 figure was an arbitrary number concocted by the researchers.

"That's pretty shoddy research," he said. "There is no evidence there is a problem with the arbitration system."

Health plans are not the only ones to use arbitration. Because it is often a cheaper and quicker alternative to going to court, government agencies use arbitration to resolve disputes with their employees.

However, the consumer groups said a recent change in state court guidelines that makes it more difficult to seal court records should be applied to arbitration records, as well.

"Health plans should not have the benefit of secrecy for misdeeds simply because they utilize binding arbitration agreements," their petition says.


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