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home / healthcare / press releases

Mar 27, 2000

CONTACT: Andrew Pontious 310-392-0522 x308

California HMO Patients Limited to Pre-Dispute, Binding Arbitration Launch "HMO Arbitration Abuse Report" Campaign

New Story & Picture Faxed Daily To Every Legislator
The Foundation for Taxpayer and Consumer Rights today launched an "HMO Arbitration Abuse Report" campaign to reveal daily the stories of patients harmed by their HMOs, yet forced to have their disputes settled in private, HMO-controlled arbitration hearings. Patients can be forced into mandatory, binding arbitration as a condition of joining an HMO or managed care health plan prior to any dispute arising.

The picture and story of another arbitration abuse victim will be faxed and delivered daily to every member of the California Assembly and Senate and to opinion leaders.

California Assembly Bill 1751 (Kuehl), sponsored by FTCR, guarantees that HMO arbitration be voluntarily entered into only after a dispute arises. This follows the 1998 recommendations of a commission of the American Arbitration Association, American Bar Association and American Medical Association. 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 and jury.

"Patients deserve the day in court that HMO liability legislation promised them," said Andrew Pontious, a patient advocate for FTCR, who researched and wrote the arbitration abuse reports. "Just because a patient joins an HMO should not mean that they have the courthouse doors closed to them. The right to sue an HMO should mean the right to trial."

Forced arbitration can be lengthy, costly, unfair, and conceals quality of care violations from public scrutiny.
* Arbitrators often depend on repeat business from HMO corporations and are more likely to rule in their favor.
* Patients complain of abuse and delays by attorneys who are not subject to discipline by judges.
* Arbitrators generally charge $100-$400 per hour, compared to $350 per day generally for court costs.
* None of the abuses or documents uncovered in the process are public record.
* There is no media scrutiny, publicly accountable judge, or jury of one's peers.
* There is judicial review only in cases of outright fraud, not judicial error.

The first "HMO Arbitration Abuse Report" is Peter Berman of Los Angeles whose wife died of cancer due to HMO cost-cutting. 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

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