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Read Making a Killing

home / healthcare / press releases

NEWS RELEASE
Feb 25, 2000


CONTACT: Jamie Court - 310-392-0522 x327

Widower Would Have His Day In Court Under Proposed HMO Reform

(Los Angeles) The Foundation for Taxpayer and Consumer Rights (FTCR) and Assembly Member Sheila Kuehl joined with Peter Berman, a Deputy District Attorney for the County of Los Angeles, who discussed his wife's death due to cancer and HMO cost-cutting. (Berman's full statement follows.)

Berman did not know until his wife Renee's medical problems developed that his HMO, Health Net, would claim the family had signed away their right to trial simply because they had signed up for the health plan. Health Net's forced binding arbitration agreement has precluded Mr. Berman from taking his HMO to court to date. Renee Berman died in 1997.

FTCR's Jamie Court and Kuehl presented AB 1751(Kuehl), sponsored by FTCR, that will prevent HMOs from forcing patients into pre-dispute binding arbitration as a condition of health coverage. AB 1751 guarantees that HMO arbitration be voluntarily entered into only after a dispute arises.

"Prior to her death, in an an effort to prevent others from becoming victims of similiar abuses, my wife decided to go public with what happened to her, and we filed a lawsuit against the doctors and the HM0," said Berman. "After the lawsuit was filed, we discovered that there was a mandatory arbitration clause attached to the HMO policy. We were never told about it when we were required by the County of Los Angeles to take the policy, and to my surprise, I discovered after the fact that when I signed a form allowing the County to automatically deduct the premium payments from my paycheck, that buried in the small print on that form was an agreement to to submit claims to mandatory arbitration. I've spent almost five years now fighting that clause, and so far the lower courts have twice upheld my family's right to get a jury trial. But the HMO has appealed both times, and next week, we will once again litigate at the appellate level the question of whether or not we must submit to forced arbitration."

In 1998, a joint commission of the American Bar Association, American Medical Association, and American Arbitration Association concluded "In disputes involving patients, binding forms of dispute resolution should be used only where parties agree to do so after a dispute arises." AB 1751 requires just this.

"Patients should not have to sign away their right to a court trial simply because they join an HMO," said Jamie Court, FTCR's advocacy director. "HMOs must know that they will face the eyes of jurors when they deny and delay medically necessary treatment and serious harm results. Repeated quality of care violations at HMOs should not be hidden behind the curtain of mandatory arbitration. Standards agreed to by the American Bar Association, American Medical Association and American Arbitration Association should be good enough for Californians."

Court noted that research among patients for his new book, Making A Killing: HMOs and the Threat To Your Health (Common Courage Press), found that forced arbitration can be lengthy, costly, unfair, and conceals quality of care violations from public scrutiny.

o Arbitrators often depend on repeat business from HMO corporations and are more likely to rule in their favor.

o Patients complain of abuse and delays by attorneys who are not subject to discipline by judges.

o Arbitrators generally charge $100-$400 per hour, compared to $350 per day generally for court costs.

o None of the abuses or documents uncovered in the process can be made public.

o There is no media scrutiny, publicly accountable judge, or jury of one's peers.

o There is judicial review only in cases of outright fraud, not judicial error.

Under state HMO liability legislation, passed in 1999 and to take effect in 2001, patients will be able to recover damages from an HMO that interferes with the quality of their care. But an HMO enrollment contract can still force patients into a private arbitration system controlled by private lawyers, rather than by a judge or jury.

Assembly Member Kuehl said, "I was thrilled with Governor Davis' leadership and vision in granting Californians the right to finally have their disputes with their HMOs heard by a jury of their peers. HMOs must not be allowed to subvert the Governor's and the Legislature's patient protections in this area. Private arbitration is just that: private. My bill will protect patients and make sure that HMOs can finally be held accountable to the patients and the public."

FTCR is a non-profit, non-partisan consumer group based in Santa Monica.
###

_______________________________
Statement of Peter Berman


My name is Peter Berman and I'm a Deputy District Attorney employed by Los Angeles County. But today I'm appearing here as a concerned citizen in support of this bill.
Two and a half years ago, my wife died as a result of malpractice by her physician, malpractice which was encouraged and endorsed by her HMO. A necessary surgery, one that she was entitled to receive under the provisions of her policy, was withheld because the system set up by the HMO offered financial incentives to her medical group to withhold expensive care. Ultimately, that decision allowed her cancer to spread, causing her years of extreme pain and suffering while she battled to hang on to her life.

Prior to her death, in an an effort to prevent others from becoming victims of similiar abuses, my wife decided to go public with what happened to her, and we filed a lawsuit against the doctors and the HMO. And unlike most Americans, I was allowed to bring this lawsuit, because I am a government employee, and that makes me exempt from the provisions of ERISA (the Employee Retirement Income Security Act).

After the lawsuit was filed, we discovered that there was a mandatory arbitration clause attached to the HMO policy. We were never told about it when we were required by the County of Los Angeles to take the policy, and to my surprise, I discovered after the fact that when I signed a form allowing the County to automatically deduct the premium payments from my paycheck, that buried in the small print on that form was an agreement to submit claims to mandatory arbitration.

I've spent almost five years now fighting that clause, and so far the lower courts have twice upheld my family's right to get a jury trial. But the HMO has appealed both times, and next week, we will once again litigate at the appellate level the question of whether or not we must submit to forced arbitration.

Arbitration is touted by the HMO's an inexpensive, quick way to resolve disputes. It's supposed to be consumer friendly and a way to keep down the costs of medical premiums and medical care. The truth is, it is a system that insulates the HMOs from accountability for their abuses.

In my family's situation, they are willing to delay and to do anything they can to prevent us from exercising our right to a jury trial because they know they have liability and that a jury will punish them for what they've done. Their only chance to cover up the abuses inherent in the system they've created and forced upon the consumers in this state is to keep the litigation proceedings secret....and to do that, they have to get our case and others like it to arbitration... where quality of care violations are concealed from public scrutiny.

Arbitration is unfair in all cases where the HMO has been in collusin with the physicians to withhold patient care. It is unfair because injured parties only have one case in a lifetime while the HMO is in a position to select arbitrators on a regular basis. It doesn't take a genius to recognize the obvious...that if an arbitrator wants to make a living by handling these cases, then the arbitrator will have to side most often with the HMO if they want to be selected again. That unfairness taints the system, and routinely results in small judgements against the HMO, even in the most egregious cases. HMOs have no fear about losing in arbitration, because the judgements tend to be so small that they are written off as the cost of doing business, and that eliminates any incentive for them to correct the abuses inherent in the system.

The proposed bill would eliminate pre-dispute binding arbitration. That will insure that those cases which go to arbitration are the ones that truly belong there. Those cases which are serious, the ones that the public needs to know about, would then be free to be litigated in open court, with the potential for damages that would force the HMOs and their doctors to be accountable for their actions.

Passage of AB 1751 will prevent abuses because there will be the certain knowledge of accountability, and that will protect us all.


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